To squash inflation, the Federal Reserve increased the benchmark federal funds rate by 525 basis points since March 2023, the fastest series of rate hikes since the 1980s. That aggressive monetary policy has paid off. inflation cooled sharply over the last 16 months, so much so that the futures market is signaling an end to the rate hike cycle, according to CME Group's FedWatch Tool.

Now what? The Fed has led six other rate hike cycles since 1988, and the S 500 returned an average of 23.7% during the 12-month period immediately following those events, according to data from Morningstar. In other words, if the current rate hike cycle has indeed ended, history says the S 500 -- a benchmark for the broader U.S. stock market -- could climb about 24% in the next year.

Here are two growth stocks to buy before the rally.

Continue reading

Source Fool.com