Stock market outlook: Bull market could falter with higher rates

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The bull market in stocks could disappear as investors get whacked by even higher interest rates and higher unemployment from the Fed's inflation fight, Bank of America says

The bull market in stocks could get slammed back down, as the Federal Reserve's inflation fight will raise interest rates even higher and spark higher unemployment in the economy, Bank of America said.

Fed officials could end up raising interest rates to 6% within the next 12 months, strategists predicted, lifting the Fed funds rate another 75-100 basis points above its current range. That's largely because the central bank remains focused on its goal of bringing inflation back down to 2%, withGetting inflation below 3% could also bring a 4% or higher unemployment rate, as higher rates tighten financial conditions and weaken the labor market.

. The bank estimated there's a 25% chance that US could enter a recession in the next year, and a 70% chance the economy will enter a slowdown without a full-blown recession.

 

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