Here’s Why Stocks Rallied After The Fed’s Massive Rate Hike

Stéphane Renevier

5 months ago1:12 min

Here’s Why Stocks Rallied After The Fed’s Massive Rate Hike

In its biggest single increase since 2000, the Federal Reserve (the Fed) raised interest rates by half a percentage point yesterday. And while investors usually recoil at the sight of higher rates, they’d sent stocks up almost 3% by the end of the day – the biggest gain on the day of a Fed announcement in over a decade.

Now, the size of that rate hike wasn’t a surprise: investors had long been anticipating the bank to make such a determined move. If anything, they actually came into this update anxious that the Fed would, given inflationary pressures, have to hike rates higher or faster than planned, potentially even opting for a 0.75 percentage point hike. So when it opted to stick to the 0.5 percentage point uptick, it was cause for celebration.

As for how high stocks jumped, that’s

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