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Federal Reserve Board Chairman Jerome Powell at a hearing
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The past few years have been a great time to be an investor, with huge rallies in everything from stocks to cryptocurrencies to real estate. But with the Federal Reserve getting ready to hike interest rates to fight inflation, owners of some of these assets could be in for a rude awakening.

For years the Federal Reserve has been holding short-term interest rates at near-record low levels. But in December consumer prices rose by 7% year over year. It was the largest single-year increase since 1982. Wall Street now expects the Fed to raise interest rates as many as four times in 2022.

Higher short-term interest rates make it harder and more costly for both consumers and businesses to borrow, effectively reducing the supply of money coursing through the economy. That should help constrain prices for goods that Americans have been struggling to afford like pork and used cars – but also for investments, including the stocks in millions of retirement savers' 401(k)s, as well as speculative assets, like cryptocurrency.

“We’re at the beginning of this normalization process in terms of monetary policy, says,” Charles Schwab & Co. Chief Investment Strategist Liz Ann Sonders said. “It’s probably going to be uncomfortable.”