Fed may stutter-step rates first time in 30 years and stocks will lose

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The Fed may stutter-step its tightening cycle for the first time in 3 decades, and stocks will lose the tug of war with rates, DataTrek says

Fed Chairman Jerome Powell opened the door to ramping up the pace of policy tightening again, and stocks will be forced to recalibrate, according to DataTrek Research.

"[S]ince 1990 the Fed has never stutter-stepped at the end of a rate hiking cycle," DataTrek co-founder Nicholas Colas wrote in a note Wednesday."Powell's testimony today says the Fed is contemplating that now, reaccelerating from 25 to 50 basis point increases." The prospect of more aggressive rate hikes comes as the stock market has been pulled in opposite directions between strong corporate earnings and Fed hawkishness. But that balance looks to tip against stocks, DataTrek said.

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