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September 29, 2014

Why rate hikes are good news for stocks

  • In the past when the Fed has started raising rates after a recession, the S&P 500 index has risen by an average of 58 percent between the first hike and the peak of the market.
    • By STEVE ROTHWELL
    AP Markets Writer

    NEW YORK — It's no surprise that the prospect of a Federal Reserve rate hike worries stock investors.

    The Fed's unprecedented economic stimulus has in large part driven a surge in stock prices since 2009. The central bank has bought trillions of dollars of bonds and kept short-term interest rates close to zero. That's allowed businesses and consumers to refinance their debt at lower rates, freeing up cash to spend.


     
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