How to Protect Your Portfolio as the Fed Raises Interest Rates

The Federal Reserve raised interest rates at its September meeting by 25 basis points to a target range of 3.75%–4%, marking the first increase in more than three years as it tries to bring inflation back near 2%. The article describes this as the start of a renewed tightening cycle, with another rate increase expected by year-end and the possibility of more in 2027. Based on the Fed’s dot plot, most officials project rates to end 2027 between 4.25% and 4.5%, with only four outliers expecting cuts. It compares the current situation to past tightening cycles, noting that the S&P 500 typically held up in the 12 months after initial hikes—aside from the 2022 bear market.