If that's the case, it could mean the S&P 500 can swing up by double-digits in the next year. The end of a rate hike cycle in January 1995 saw the S&P 500 jump 35.2% in the year after. Put those together, and the average growth in the S&P 500 after a rate top is 17.4%. AdvertisementAs for what happens to stocks after the central bank cuts interest rates, Rabe wrote that returns are "mixed" in the months that follow. "By contrast, rapid monetary and fiscal policy responses to the Pandemic Crisis helped US equities recover much quicker," Rabe wrote.

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Persons: DataTrek, —, Jessica Rabe, Rabe, Jeremy Siegal Organizations: Service, Fed