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The Fed’s Plan Is Treacherous For Stocks Throughout 2023

The Federal Reserve is raising interest rates at a rapid pace. Short-term rates are expected to reach almost 5% by the end of next year. That’s up from 0% just eight months ago.

Higher rates slow the economy. Consumers make fewer large purchases using credit due to higher rates. Businesses respond by spending less on new factories and reducing other investments that require borrowing money.

Investors are worried about how higher rates will affect their stock portfolios. They should also be concerned with how the Fed is withdrawing money from the economy.

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This post appeared first on Money & Markets, LLC.