US stocks have witnessed an all-time high.
The US stock market has witnessed a historic high amid the Federal Reserve tightening the rates. Where the Nasdaq 100 has come off worst since the pandemic hit in the March of 2020, the Federal Reserve’s Wednesday meeting signals that authorized personnel are expected to raise its rates.
This made the news headlines since it is the first time since the 1950’s that the US Stocks have hit this all-time high. Historical evidence indicates that the US stocks figures for the current year are more likely to end on a comparatively better note than expected.
As per the historical records, an observation of the US stocks has proved that the market achieves better results in lieu of the Federal Reserve increasing its rates.
The stocks have increased at an average rate of nine (9) percent on an annual basis since the 1950s. This increase has brought about positive returns from amongst 11 of the 12 rate hikes. The only time the US stocks failed the US economy was when the years concurred with the 1973-1975’s recession.
As per the many analysts from across the states, the mounting concern about the spread of the Omicron Variant as well as the stricter monetary policy will have a modest effect on the positive outcomes that the market will spectator.
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The data compiled for the US Stocks for the year 2022 suggests that the Standard and Poor’s 500 Index will not finish below 4,982. This number is a whopping 13 percent higher than Fridays’ closing rate. The index has seemingly surged to double-digit returns in 2021 – its third year in a row.
What Factors Could Affect The US Stocks In 2022?
There is plenty of anticipation and US stock market predictions taking place across the US stock market. The predictions that revolve around the US stock market index include a great comparison to the previous year, specifically since the 1950’ and leading up to the year 2022.
The effects of the policy changes following the later November elections are one of the major factors. The lack of certainty and the subsequent outcomes of the elections are yet to decide the fate of the US Stock market.
The US Federal Reserve had previously slashed down the rate to a near zero. However, the decision was made in wake of the Corona Virus Disease of 2019.
Why The Higher Interest Rates?
In wake of the soaring inflation, the US Federal Reserve will seemingly increase the interest rate. This decision is to lead to a lesser borrowing rate, thus slowing down business and consumer spending. The outcome of the higher interest rate aims at putting a lid on the rising prices.
However, this sudden increase in interest rates could adversely affect the US stock market.
