-Hypothetical situation: A couple of years ago, the FederalReserve expressed concerns that the economy was heating up. Thefear was that this would initiate inflationary pressure. To keepthis from happening too rapidly, they began raising interest rates.They raised the Fed funds rate four times during 2018.
Theoretically, what should be the impact on the economy and thestock market?
Has this been the reaction we have seen from the market? Why orwhy not?
