Kevin Gordon, head of macro research and strategy at Schwab, says Fed tightening
typically raises market volatility — historically the S&P 500’s peak drawdown
averaged over 10% in the 12 months after a hiking cycle begins. He adds the
current macro backdrop remains relatively favorable, so the economy is likely to
stay resilient even if the Fed implements multiple rate hikes. Gordon notes
equities often react to Fed policy but that AI investment and oil-driven
inflation are currently the primary market drivers.
