The starting point of interest rate increase is usually in the middle and late stage of the economic upward cycle. At the end of interest rate increase, the economy has turned into the downward cycle.
Most of the time, it will cause long-term and short-term upside down of interest rates, except in 1984 and 1994, due to limited price pressure.
After the long-term and short-term upside down, most of the economy will decline, except in 1990 and 2018, because the upside down time is not long (within 6 months), and prices have fallen rapidly in the same period.
During this period, the performance of US stocks is as follows: in 1984 and 1994, the stock market maintained an upward trend; In 1990 and 2018, it continued to rise after rapid retreat; Other interest rate hike cycles have triggered a long-term adjustment of the stock market. Interest rate hike cycle in history
Why is it too late to raise interest rates? Powell is a "not too many but not empty Hawk", with strong executive power and short decision-making power.
Path: real interest rate turns positive - interest rate upside down (real interest rate) - duration (non monetary means are needed to reduce inflationary pressure).
The current earnings of US stocks (the proportion of earnings in GDP is at an all-time high) can still hedge most of the valuation contraction, but the subsequent tightening policies are likely to suppress the US economy and stock market until 2023.
The interest rate gap between China and the United States has narrowed rapidly, and the exchange rate can provide a sufficient buffer.
