Higher interest rates are on the way, but bullish will continue for a period

In terms of monetary policy, the Federal Reserve kept its benchmark interest rate unchanged at 0-0.25%, in line with market expectations. It will increase its monthly asset purchases from $15 billion to $30 billion starting next January.

The Fed is expected to raise rates three times in 2022 and three times in 2023.

The statement of the Federal Reserve's resolution was slightly hawkish. After the announcement of the resolution, the boots of accelerated debt reduction landed. The U.S. stock market first fell and then rose, and then recovered the ground lost after the interest rate resolution.

Reviewing history, stock investors may be able to put fed rate hikes on hold. According to Deutsche Bank research, there have been 13 separate rate-raising cycles since 1955, with an average duration of less than two years.

On a daily basis, the average price of the S&P 500 tends to post solid gains in the first year of a Fed rate-raising cycle, with an average return of 7.7% after 365 days; Returns began to fall 253 days after the tightening cycle began and did not break through the previous peak until the 452nd day.

In other words, historically, many of the negative effects of higher interest rates on stocks are likely to be delayed, with stocks likely to continue their upward trend for a while after they start raising rates.

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