“Is the Fed Done Raising Rates?” – What Investors Should Know

After one of the most aggressive rate-hiking cycles in decades, the Federal Reserve has finally hit pause. But is the rate-hike era really over? As a student investor, I’ve been tracking inflation data, market reactions, and Fed language — and here’s my breakdown of what it all means for the stock market.

Why the Fed Raised Rates in the First Place

In 2022–2024, inflation spiked after COVID stimulus, supply chain issues, and surging energy prices. The Fed’s main tool to slow inflation is raising the federal funds rate — basically making borrowing more expensive to slow spending.

From March 2022 to early 2025, the Fed raised rates from 0.25% to over 5.25%.

Signs the Hiking Cycle May Be Over

Here’s what’s changed:

• Inflation has slowed to around 2.4% (close to the Fed’s 2% target)

• Job market remains strong but is cooling

• Retail spending has slowed

• Fed officials are signaling a “wait and see” approach

  
  

Markets are now pricing in possible rate cuts by mid-2026 if inflation continues to trend down.

What It Means for the Market

If rates stay steady or start falling, we could see:

• Growth stocks bounce (especially tech)

• Bond prices rise as yields fall

• REITs and dividend stocks gain momentum

• More risk-on behavior from investors

But it's not all upside. If inflation ticks back up, the Fed could pivot again — and markets hate uncertainty.

My Investing Takeaways

I’m not making huge moves based on rate speculation, but I am:

• Watching Fed meetings and CPI reports closely

• Building positions in long-term growth names while prices are still reasonable

• Keeping some cash on the side for flexibility