If You Invested In SPY Stock After First Interest Rate Hike In 2022, Here's How Much You'd Have Now

Zinger Key Points
  • The Federal Reserve announced it was raising interest rates for the first time since 2018 in early 2022.
  • The Fed has raised rates eight times since March 2022.
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The Federal Reserve announced it was raising interest rates for the first time since 2018 in early 2022. Here’s a look back at what happened and how the market has performed since.

What Happened: On March 16, 2022, the Federal Reserve announced it was raising the targeted fed funds rate by 0.25% to a new range of between 0.25% and 0.5%.

This marked a major shift in previous comments about inflation being transitory. The interest rate hike also marked the first by the Federal Reserve since 2018.

“Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures,” the Fed said.

The Consumer Price Index (CPI), a gauge of the prices for consumer goods and a measure of potential inflation, was up 7.9% in February 2022, the highest jump since 1982.

Fed Reserve Chair Jerome Powell said at the time that the war between Russia and Ukraine could cause “upward pressure on inflation at least for a while.”

In March 2022, the Fed predicted it would hike interest rates six times in 2022.

Since the first rate hike in March 2022, interest rates have been increased seven additional times, most recently in February 2023.

In February 2023, the Fed raised rates by 0.25% to a new range of 4.5% to 4.75%. This marks the highest rate since before the financial crisis of 2008.

“We’re going to be looking carefully at the data between now and the March meeting … I don’t feel a lot of certainty about where that will be, it could certainly be higher than what we’re writing down right now,” Powell said.

Powell noted that there was “a lot of work left to do.”

The next rate hike could come at the end of the two-day Fed meeting set for March 21 and March 22. 

With the recent, market-rattling collapse of several banks including SVB Financial SIVB and Signature Bank SBNY, the Fed could take a different approach at its upcoming meeting. 

Related Link: Why These Economists Say The End Of The Fed's Interest Rate Hike Cycle Is Near

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If You Invested $1,000 in SPY Stock: The market has been extremely volatile since the first rate hike in March 2022.

A look back at an investment in one of the leading market indicators shows how the market has moved since the first Fed rate hike.

The SPDR S&P 500 ETF Trust SPY tracks the S&P 500, a gauge of the overall market.

A $1,000 investment in the SPY could have bought 2.35 shares of the ETF at its low price on March 16, 2022.

The same $1,000 investment would be worth $930.86 today, down 6.9% in the one-year time period.

Read Next: Peter Schiff Says Powell Was Wrong, Why Fed Rate Hikes Are Fanning Inflationary Pressure 

Photo via Shutterstock. 

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Posted In: Broad U.S. Equity ETFsEducationTop StoriesFederal ReserveETFsGeneralConsumer Price IndexFedif you invested 1000 catalystInflationInterest RatesJerome PowellS&P 500
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