Fed Raises Rates the Most Since 2000

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On the 4th of May 2022, the Fed raised the federal funds rate by 0.5%. The last time rates were raised by this much was in 2000.

Additionally, the Fed announced that they would reduce their balance sheet starting on the 1st of June 2022. The last time the Fed reduced its balance sheet was in 2018, which caused a 20% correction.

What will happen with the market?

The S&P 500 is currently down over 12% year to date for 2022. It seems that investors have already priced in these rate hikes since they were bound to happen with the significant inflation the economy is facing.

However, I would not be surprised to see the SPY correct 20% from the top, bottoming around 380–390. This price point is only my opinion, and anything can happen.

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