Will the Stock Market Crash if the Federal Reserve Raises Interest Rates? Soaring Bond Yields Portend Trouble.

Strong jobs growth and accelerating inflation have led investors to expect Federal Reserve rate hikes of 0.5% over the next 15 months. Historically, rate-hiking cycles have caused the S&P 500 and Nasdaq to decline by 7% and 8% respectively in the following three months. Rising Treasury yields to 5.18% suggest investor nervousness, with potential for a market crash if elevated energy prices from the Iran conflict cause sustained core inflation increases.