Zinger Key Points
- On May 4, the Federal Reserve announced it's raising its fed funds interest rate target by 0.5% to a new range of between 0.75% and 1%.
- The decision marked the first time the Fed has issued a rate hike of 0.5% or larger in more than 20 years.
- In a market dominated by tariff tensions, geopolitical surprises, and Fed uncertainty, Matt Maley's technical approach delivers clear entry & exit points for consistent income potential. Try it free for 7 days
Interest rates are skyrocketing. The speed and rate of the recent move higher in 10-year U.S. Treasury yields is unprecedented. As you can see on the following chart, there has been nothing since at least 1963 that even comes close.
This could have a significant impact on both the economy and the stock market. And it won’t be good.
Higher interest rates are bad for companies because it makes them less profitable. Most companies pay their day-to-day expenses with short-term loans from banks. As rates move higher, these loans become more expensive.
These increased costs cut into a company’s profits. This could cause the price of their shares to fall.
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