Since 1990, the Fed raised rates starting in 1994, 1999 and 2004. But those years marked the beginning of long periods of rate increases. Most experts see this rate rise by the Fed as a one-and-done deal for 2015. Call it a tip toe rate increase, not a sprint.
In short, there’s no close comparison to these times, especially anything equivalent to coming out of the Great Recession.
Related: Doom and gloom dominates Corporate America
The Fed is cautious. American markets are already off to a rocky ride this year. The Dow and S&P 500 both dropped 3% in January while bonds rallied, driven by foreign investors who want a safe bet.
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Perhaps the only thing experts agree on fully is that the Fed rate hike this year could be the biggest factor impacting stock and bond prices.
“From a [big picture] macro standpoint, I don’t believe there’s any influence that’s greater than Fed policy,” says Johnson. “There is a very strong association between Fed monetary policy and capital market returns.”
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