Federal Reserve Board Chairwoman Janet Yellen testifies before the Senate Banking, Housing and Urban Affairs Committee February 14, 2017 in Washington, DC.
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It's one week before the start of the Fed's two-day meeting where the central bank is expected to hike interest rates, so we looked at what the market did historically before and after a rate increase. A distinct pattern emerged, according to our analysis using Kensho.
We also found certain bank stocks that tend to rally in the week before a Fed hike.
During the week leading up to the Fed decision day where it chose to raise rates, typically rose, led in part by bank shares, as investors anticipated the move and cheered the growing confidence in the economy that usually accompanies that decision by the central bank.
