Charting the Fed rate-hike path its and impact on the stock market

While the Fed has been steadfast in its objective of curtailing inflation, focus has now shifted to maintaining a balance between bringing down inflation and avoiding financial instability

The US Federal Reserve (Fed) began cutting rates in March 2020 in the wake of the Covid-19 pandemic. On March 16, 2020, it delivered a 100 basis points (bps) rate cut to stave off an economic crisis triggered by the shutdowns caused by the Covid-19 outbreak. Between March 2020 and March 2022, the US central bank kept policy rates near-zero. But spiralling inflation caused the Fed to pivot to a hawkish stance. Since March 2022, the Fed has hiked interest rates by 450 bps to 4.75 per cent--the highest since 2007. The quantum of the four out of previous seven