It’s increasingly become an article of faith that the end of QE (i.e., a rate hike to zero) portends trouble for the market.
This table from Goldman Sachs (via @burak_tekes) disputes the idea that stocks do bad after rate hikes.
[credit provider=”Goldman Sachs”]
Interesting, but, there’s a logical reason why stocks would usually do well in the year after a rate increase. Rate increases usually come when the economy is strong, and a strong economy should help stocks.
The economy is only so-so right now. Also, the rules are (according to Richard Koo, anyway) different in a balance sheet recession, as opposed to a normal recession, so past rate hikes might not be applicable.