Will the Federal Reserve Trigger a Bear Market? History Has Good and Bad News for Investors

After months of foot-dragging, the Federal Reserve finally hiked its benchmark interest rate last week. Many economists and Fed watchers had expected that rate hike earlier, perhaps back in July, but Fed Chair Kevin Warsh said he and his colleagues waited a bit longer than expected to better assess the underlying causes of persistently elevated inflation.

Fair enough. But the Fed's move on rates doesn't look like a one-and-done hike. I wrote an article shortly after the Fed announced its latest policy change, arguing that all indicators -- the Fed's own projections and verbiage, as well as bond and futures market pricing -- suggest that last week's hike is likely the first of several.

I won't rehash that article here, other than to say that the fed funds futures market is pricing in two to three more quarter-point hikes by the end of 2027. So, it's probably not a single hike, and more likely a series of hikes.

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