Rate hike effects?

Not sure if they will take up the slack with car financing. I think banks are just moving up the yield curve with securities investments instead of actually lending.

Besides, the incredible rates are from Automaker subsidies. Short Autos.
 
Fed is a 500 stock watcher. It looked like they were pissed the FOMC statement was interpreted dovish with a Wed-Fri risk/inflation reaction . The following Monday the odds spiked from 35 BEFORE the jawboning began Tuesday. Animal spirit fears in 500 stocks outweigh PHD level theorems and models. 3 weeks later 500 stocks can hardly drop half of 1 percent in a week and the last 2 weeks saw steepening! In the 2-10 year segment, along with the entire curve rising. short term I think themarket says Phhft! and carries on. Maybe look to EM for stress.
On a longer timeframe, with hindsight, 3 month LIBOR, USD tightness/borrowing cost has trended steadily , 20-90 bp. Since fed tightening bias started.
You c an bet fed will get caught in a severe stock downturn smack dab in the middle of a tightening cycle, not recognizing being so far behind the curve is the reason stocks are correcting. When?
 
AlfredGervais said:
Falling interest rates could boost stock markets as well as equities. That’s because when rates drop, investors have to buy stocks and usually, those are the high yielding ones, for them to make money. (source: The Benefits and Risk of Negative Interest Rates for Investors)
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In this case rate hike should be good for the stock market as it telescopes that the Fed believes the economy is going strongly and that is good for stock prices. And a 0.25% is not a big increase.
 
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