The Federal Reserve's latest 75-basis-point interest rate hike sent another shockwave through the stock market, ramping up worries among investors about inflation and possible recession.

The benchmark federal funds rate now ranges between 3% and 3.25% (the highest since 2008). Fed officials admit further hikes could come this year, estimating that the benchmark rate could hit 4.4% by the end of 2022, and rise to 4.6% sometime in 2023. The central bank is optimistic that inflation will decelerate next year, increasing 2.8% overall in 2023 as compared to an estimated 5.4% overall rise in 2022.

If interest rate hikes do ease, the stock market may calm a bit next year. This probably explains why investment banker Stifel Financial forecasts the S&P 500 will rally to 4,400 points in the first quarter of 2023. That would represent a 19% upside from the current levels, with Stifel estimating that the stock market may start rallying in November.

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Source Fool.com