What does the effects of federal interest rate on market??

1. When federal cut cut ...rate 1.25% bazaar be down approaching 8000 points in 2001-2..why.

2.When federal increase up up rate 8.25% flea market is up up..14000 ...contained by 2007...why?...

Answers should be specific..please.

Answers:
change within the federal interest rate should 'unanimously' hold the following effect --

1. a cut in rates should spur lend / discount - stocks budge up
2. an increase in rates tightens the money supply - stocks step down

but... if Bernake comes out and say "holy crap the reduction is much worse than i thought it'd be" and cuts rates, the refusal current outlook for the discount would push stocks lower (as the effect of lower rates will purloin time to turn the cutback around).

if Bernanke see the reduction is overheated and raise rates, again, stocks might move about up b/c of the current that the cutback is doing so economically

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