RIYADH: The US Federal Reserve’s recent announcements to hike interest rates in March may have sent markets in tatters, but that won’t necessarily translate into an immediate, medium-term market correction if past instances are anything to go by.
Market experts who spoke to Arab News say there is evidence that stock market prices can rise in the first year of hikes.
“For example, overnight interest rates started rising in late 2015 before peaking in early 2020 just before the pandemic started. In that period equity markets strengthened despite the rate increases,” says Ibrahim Bitar, head of investment and treasury at Emirates Investment Bank.
Similarly, he adds, in the 2002 cycle, interest rates started rising in…