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If you're selling stocks because the Fed is hiking interest rates, you may be suffering from 'inflation illusion'

Por: MarketWatch Politics September 24, 2022

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To show why higher interest rates aren’t necessarily bad for equities, I compared the predictive power of the following two valuation indicators: If higher interest rates were always bad for stocks, then the Fed Model’s track record would be superior to that of the earnings yield. It is not, as you can see from the table below. The table reports a statistic known as the r-squared, which reflects the degree to which one data series (in this... + full article



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