It has been a rough year so far for the stock market, despite Wednesday’s rally. Unfortunately for investors, the Federal Reserve probably doesn’t feel their pain. Nor is it likely to soon.
Fed policy makers on Wednesday raised their target range on overnight rates by a half-percentage point—more than the quarter-point increase they made in their initial tightening foray in March—and made clear that the rate hikes will keep on coming. They also announced that the Fed will begin reducing its $9 trillion asset portfolio by letting $47.5 billion in Treasurys and mortgage bonds roll off for each of the three months starting in June, and increasing that amount to $95 billion starting in September.