You Can't Control the Federal Reserve, but You Can Control What You Do About It
For roughly a decade, most investors hardly thought about the Federal Reserve. The central bank kept rates near zero for several years following the great financial crisis, and the stock market flourished.
However, over the last couple of years, the Fed has taken center stage. Following the economic reopening, inflation soared due to factors including excess savings from government stimulus, labor shortages, and supply chain delays.
After first dismissing inflation as transient, the Fed began ramping up the benchmark fed funds rate in March 2022, lifting it roughly 5 percentage points in a year, the fastest it's raised rates in at least a generation. The benchmark rate is now in a range of 5.25% to 5.5%, and that rate strongly influences key interest rates like yields on Treasuries and mortgage rates. As interest rates have risen, stocks have fallen and the major indexes are still well below the peaks set in late 2021 and early 2022.
Source Fool.com
