Past Equity Market Responses to Fed Rate Hikes

Outside of political considerations with Russia and Greece, Federal Reserve interest rate policy is probably the most talked of issue on the minds of investors today.

The debate about was heightened further with Fed Chairwoman's statement that equity market valuations are "quite high."

With this as the background, how do equity markets do during Fed tightening cycles?

Fed Rate Hikes - Tightening Cycles

First, as background, here's a look at what the Fed has done with the Federal Funds rate during past tightening cycles.

Each represents a tightening cycle, with the label on each line representing the month and year in which the Fed was tightening rates.

The horizontal axis represents the number of days the tightening cycle lasted.

The vertical axis captures...