Equity Bulls Count on Fed-Cycle Math That Worked For Decades
- BofA says ‘sell the last rate hike’ on rising recession risk
- Still, monetary history offers some comfort for stock bulls
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At first blush, stock bulls on Wall Street have history on their side if the Federal Reserve’s aggressive policy-tightening campaign really is drawing to a close.
Over eight previous monetary-tightening cycles, the S&P 500 ended up higher by an average 13% a year after the last interest-rate increase, per Strategas Securities. Meanwhile the famous American consumer remains largely alive and well, first-quarter corporate earnings are reviving Big Tech and supply bottlenecks are easing. All that raises the possibility of a fresh bull cycle ahead akin to the mid-90s.