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The Correlation Between the Federal Funds Rate and the U.S. Stock Market Performance

Zhongkai Ouyang


This paper aims at examining the relationship between interest rate and stock prices, using the Standard and Poor's 500 (S&P 500) index during the 2001 and 2022 periods to represent the stock market's performance.


Interest Rate; Stock Prices; Stock Market

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Included Database


Bernanke, BS., Kenneth NK. “What Explains the Stock Market’s Reaction to Federal Reserve Policy?” The Journal of Finance, vol. 60, no. 3, American Finance Association, Wiley, 2005, pp. 1221–57.

Durham, JB. “Monetary Policy and Stock Price Returns.” Financial Analysts Journal, vol. 59, no. 4, CFA Institute, 2003, pp. 26–35.

Ghossoub, EA, and Robert RR. “The Stock Market, Monetary Policy, and Economic Development.” Southern Economic Journal, vol.79, no.3, Southern Economic Association, 2013, pp. 639–58.

DOI: http://dx.doi.org/10.18686/fm.v7i3.4411