The Federal Open Market Committee is slated to give its final and much-anticipated meeting announcement of the year on Wednesday. If the Federal Reserve elects to raise interest rates, it would be the first time since last December, which marked the first rise in nine years.
When the Fed raises interest rates, most investors expect stock prices to decline, an article from Option Alpha stated.
“However, historical data shows a decline in stock prices during rate hike cycles to be the exception rather than the rule. In most cases both stocks and bonds perform well during the year leading up to a rate hike cycle and the year after,” the article stated.
Stock market website Option Alpha created the following infographic to help present what will likely happen to interest rates if they rise.
Click to enlarge
(Source: Option Alpha)