What Influence Will the Raising of Interest Rates Have on the S&P 500 in the Epidemic Era?

Abstract

With the raising of inflation and the recession of economy, the negative effect of monetary easing policy in the era of COVID-19 has appeared gradually. The Federal Reserve increases federal funds rate constantly to reduce the inflation. However, the inflation keeps soaring and the federal funds rate keeps an upswing which result in a constant sliding in stock market. The research in this article shows that the source of the inflation is the supply imbalance. It is useless that simply increase federal funds rate which can cause an economy recession like 1981s. Finally, the research finds that the only thing human can do is to try everyone best to offer a buffering during the world recession and fast the speed of energy revolution and economy recovery which can not only estimate the stock market but also restrict the decrease of S&P 500 index urging the recovery of finance and economy.