The image above is a chart comparing the Fed funds rate and the S&P 500 over the past 10 years.
Here are the analysis results:
There is no simple inverse relationship where a higher Fed funds rate leads to a decline in the S&P 500.
Rather, the direction of interest rate movement and how the market anticipates that change are far more important than the absolute level of interest rates.
Ultimately, to understand the relationship between stock prices and interest rates, we need to consider the direction of interest rates, market expectations, economic conditions, and corporate earnings together.
▶ Original source: https://www.macrotrends.net/2638/sp500-fed-funds-rate-compared
