After a stellar and unusually calm year for stocks in 2021, so far 2022 might appear almost chaotic by comparison, with markets experiencing a sharp correction in January. A quick survey of history reveals that this type of recent volatility is actually quite normal, and that it was 2021’s lack of market turmoil that is truly the outlier. That said, January has been volatile, and investors are wondering how did we get here, and what should be expected going forward? While there is a myriad of reasons for markets to worry, such as Omicron impacting economic growth or ongoing supply chain disruptions, the key issue is the Federal Reserve’s (Fed) shift in policy. Investors appear concerned that the Fed will hike interest rates faster than previously expected. The S&P 500 is down 7.4%, small-cap stocks represented by the Russell 2000 index are down 9.4%, and the technology heavy Nasdaq index is down 11.4% for the year through market close on January 24th, 2022 . Investors should moderate market return expectations and prepare for more normal pullbacks.