The Federal Reserve Is Raising Interest Rates. Here's What History Says That Means for Investors.
The whole point is to impact the economy that for-profit companies depend on.
Overview
Interest rates are on the rise. Just last month, the Federal Reserve raised the federal funds rate by another quarter of a percentage point, pushing it to a target range of between 3.75% and 4%. Traders are betting on at least one more quarter-point hike before year-end, too. It's a far cry from the early 2022 fed funds rate of less than 0.25%, when lingering inflation forced the Federal Open Market Committee (FOMC) to act.
These rising interest rates are impacting investors as well. Higher rates are meant to slow the economic growth that's fostering inflation, but slower economic growth also works against for-profit companies. Plenty of people are understandably uncertain as to what the future holds, and they're staying on the sidelines. They're right to be concerned, too, if history is any indication.
Details
Still, attempting to sidestep this impact may pose more net risk than net reward. See, while we generally know what's likely to happen from here, we're also missing some key details about what awaits.
Source
Originally published at www.fool.com.