The Federal Reserve on Wednesday lifted benchmark interest rates for only the third time in about a decade, and that has caused trepidation among some market participants. Lance Roberts, chief investment strategist at Clarity Financial, makes the case in one chart that raising interest rates off ultralow levels during a period of tepid economic growth coincides with recessions in the following three to nine months see chart below, which compares real, inflation-adjusted, GDP to Fed interest rate levels.

The Fed lifted key rates by a quarter-point Wednesday to a range of 0.

The rate increase comes as the U. Government data show that gross domestic product—the official report card of economic performance—was growing at a seasonally adjusted pace of 1. Woeful productivity, defined as the average output per hour of work, has been another bugaboo for economists and the Fed, for the past six years. Higher rates could exacerbate both problems, especially since corporations tend to benefit when borrowing costs are low.

On Wednesday, the Dow ended 0. She also said the Fed wants to lift rates from near-zero levels to provide more cushion should any major shocks occur, providing the central bank more tools to respond.

How does the stock market affect gross domestic product (GDP)? | Investopedia

Members of the U. But some inflation gains were pegged to volatile oil prices US: In part, the Fed is normalizing monetary policy—in other words, yanking it higher from superlow levels—ahead of any fiscal stimulus measures that Trump has promised to implement.

Research papers on stock market volatility in indian has proposed a raft of new legislation, including tax cuts, an increase in infrastructure spending and deregulation, which could boost the economy and leave the central bank flat-footed with the threat of inflation moving well ahead of its target.

The Dow Jones Industrial Average has climbed However, Roberts fears that equity prices could come tumbling down, ending a placid streak in the market, as higher borrowing costs for corporations and individuals—pointing to increases in everything stock market gdp growth higher costs to buy a house or car to the elevated costs of companies work from home proofreading jobs india their own stock—aggravate lackluster growth.

To be sure, not everyone agrees with this pessimistic view. Indeed, quite the contrary for economists at Goldman Sachs, who believe that the Fed may be lagging behind economic indicators like inflation and may need to be on a more aggressive path to hiking rates.

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In December, the Fed penciled in three quarter-percentage-point increases for and held to that pace, according to its so-called dot plot of projections for future rate hikes by Fed members. That is an forex scanner trading charts live turn for the U.

Mark DeCambre is MarketWatch's markets editor.

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Intraday Data provided by SIX Financial Information and subject to terms of use.

Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U. Intraday data delayed at least 15 minutes or per exchange requirements.

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