Week of 05/01-05/05 The Fed raises interest rates by 25-basis points, again.

The biggest news this week was the announcement by the Federal Reserve Chairman, Jerome Powell, to raise interest rates again by 25-basis points. This comes after various economic reports for March signaling inflation still lingering in our economy. The Fed also announced the potential for pausing the interest rates hikes soon, but the study of upcoming economic data will dictate such actions. This recent rate hike places the stock market in a vulnerable position to experience a mild recession and low levels of gains for the remainder of the year. Bank worries are on the rise since no tightening to the interest rates have materialized and a similar crisis as the Silicon Valley Bank may emerge soon. History as shown us that a high level of inflation and interest rate hikes do not make a good cocktail mix for the economy and usually this situation ends up in some sort of crash or recession. Investors had already priced in the much anticipated 25-point rate hike, as the market did not seem to react in a volatile manner as in previous announcements.