The U.S. Federal Reserve raised interest rates by 0.5% in more than two decades on Wednesday.
The target fed funds rate now stands between 0.75% and 1.0% as the central bank cited elevated inflation as its reasoning for hiking the interest rates.
The Previous Hike
The last such rate hike took place at the turn of the millennium on May 16, 2000. At the time Bill Clinton was in the White House and Alan Greenspan was the Chair of the Fed, when the central bank hiked the federal funds rate by 50 basis points to 6.5%.
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The Investment
If an investor decided to invest $100 each into SPDR S&P 500 ETF Trust SPY, an exchange-traded fund that tracks Standard & Poor’s 500 Index, Apple Inc AAPL and Amazon.com, Inc AMZN — two of today’s major tech names in May 2000 on the day of that rate hike, here’s how much they would have today.
The calculations are based on the Friday closing prices when SPDR S&P 500 closed at $429.06, Apple at $166.02, and Amazon at $2,518.57.
| Investment | Date Of Purchase/Listing | Purchase Amount | Purchase Price | Units/Shares Obtained | Current Worth | Percentage Change |
|---|---|---|---|---|---|---|
| SPDR S&P 500 ETF Trust | May 16, 2000 | $100 | $97.63 | 1.02 | $439.50 | 339.5% |
| Apple | May, 16, 2000 | $100 | $0.81 | 123.46 | $20,496.30 | 20396.3% |
| Amazon | May 16, 2000 | $100 | $59.06 | 1.69 | $4,252.74 | 4152.74% |
The total $300 invested by the investor would have grown to a whopping $25,188.54. They would have seen a percentage gain of 8296.2% through the last nearly two decades.
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