📰 After years of waiting, the US Federal Reserve has raised rates again. In September, it increased the target range for the federal funds rate by 25 basis points to 3.75%-4.00%. The rationale is also quite straightforward: inflation remains too high, energy prices have rebounded, and the labor market has not yet shown any clear signs of deterioration.
🔥 But the notion that “rate hikes will inevitably cause a selloff” is not fully supported by historical data. BlackRock analyzed seven rate-hiking cycles since 1983. In the 12 months following the first rate hike, US stocks rose an average of 4.7%, US bonds gained an average of 3.07%, and high-yield bonds increased by an average of 4.68%.
Honestly, the key isn’t just whether rates are slightly higher—it’s whether the economy can withstand them, and whether rate expectations will keep shifting frequently. As long as corporate earnings and employment still show resilience, growth may offset part of the pressure from higher financing costs. However, if inflation repeatedly comes in above expectations and long-term yields climb quickly, stock valuations would need to be repriced continuously.
💡 The bond story is also not purely negative. The real yield on 30-year US Treasury Inflation-Protected Securities (TIPS) has already exceeded 3%. With high rates, new buyers can secure higher coupons. But the cross-hedge between stocks and bonds is weakening: the correlation coefficient rose from -0.22 between 2010 and 2019 to 0.51 since 2020.
🤔 BlackRock expects another rate hike could happen in 2026. Do you think the market fears more continued rate hikes, or fears that inflation will keep flaring and cause rates to suddenly get out of control?
#美联储 #加息 #美股 #bond market
🔥 But the notion that “rate hikes will inevitably cause a selloff” is not fully supported by historical data. BlackRock analyzed seven rate-hiking cycles since 1983. In the 12 months following the first rate hike, US stocks rose an average of 4.7%, US bonds gained an average of 3.07%, and high-yield bonds increased by an average of 4.68%.
Honestly, the key isn’t just whether rates are slightly higher—it’s whether the economy can withstand them, and whether rate expectations will keep shifting frequently. As long as corporate earnings and employment still show resilience, growth may offset part of the pressure from higher financing costs. However, if inflation repeatedly comes in above expectations and long-term yields climb quickly, stock valuations would need to be repriced continuously.
💡 The bond story is also not purely negative. The real yield on 30-year US Treasury Inflation-Protected Securities (TIPS) has already exceeded 3%. With high rates, new buyers can secure higher coupons. But the cross-hedge between stocks and bonds is weakening: the correlation coefficient rose from -0.22 between 2010 and 2019 to 0.51 since 2020.
🤔 BlackRock expects another rate hike could happen in 2026. Do you think the market fears more continued rate hikes, or fears that inflation will keep flaring and cause rates to suddenly get out of control?
#美联储 #加息 #美股 #bond market
