Are there any characteristics of the Fed’s seven interest rate hikes?
The Federal Reserve has raised interest rates seven times since the 1980s, with the most recent round lasting from March 2022 to the present. The rate hikes are basically over and we are just waiting for the next rate cut.
1. March 1983 to September 1984
Background of interest rate hikes: 1960s and 1970s, the Vietnam War, excessive money supply and high inflation, and the second oil crisis.
Rate hike cycle strength: 16 months, 300bp
The next rate cut cycle begins: 1984/9/20
The interval between the last rate hike and the next rate cut: 1 month
II. January 1987 to May 1989
After the Plaza Accord was signed in 1985, the US dollar index continued to depreciate, which led to rising inflation in the United States. The Federal Reserve began monetary tightening in early 1987 and was forced to stop after the global stock market crash in October.
Rate hike cycle and intensity: 28 months, 393.75bp
The next interest rate cut cycle starts on June 6, 1989
The interval from the last rate hike to the next rate cut: 1 month.
3. February 1994 to February 1995
Background of rate hike: The economy and stock market showed signs of overheating after the rapid rebound from the recession. The Fed subsequently raised interest rates at a pace that exceeded market expectations, causing significant volatility in the bond market. During this period, the Fed began to increase its guidance on inflation expectations.
Interest rate hike cycle and intensity: 11 months, 300 bp.
The next rate cut cycle starts on July 6, 1995
The interval from the last rate hike to the next rate cut: 5 months.
IV. June 1999 to May 2000
Background of interest rate hike: The Fed responded by cutting interest rates in response to the Asian financial crisis. In June 1999, the Fed decided to withdraw its loose monetary policy and began to raise interest rates, which was followed by the bursting of the dot-com bubble.
Interest rate hike cycle and intensity: 11 months, 175bp.
The next interest rate cut cycle starts on January 3, 2001
The interval from the last rate hike to the next rate cut: 8 months.
V. June 2004 to June 2006
Background of rate hikes: In 2001, the Federal Reserve slashed interest rates as the stock market crash triggered a recession. Since then, the economic recovery and rising house prices have raised concerns about asset bubbles, and the Fed has started to raise interest rates again.
Interest rate hike cycle and intensity: 23 months, 425bp.
The next interest rate cut cycle starts on September 18, 2007
The interval from the last rate hike to the next rate cut: 14 months.
VI. December 2015 to December 2018
Background of interest rate hike: After a long period of zero interest rate and QE policy, the Fed started the process of normalizing monetary policy. The pace of interest rate hike was cautious in the early stage, but it was significantly accelerated and even radical in the later stage. The hawkish degree was much higher than market expectations.
Interest rate hike cycle and intensity: 35 months, 225bp.
The next interest rate cut cycle starts on August 1, 2019
The time between the last rate hike and the next rate cut: 8 months
VII. March 2022 to present
Background of interest rate hike: In 2020, in order to fight the epidemic and save the nearly stagnant domestic economy, the Federal Reserve once again offered a policy combination of "zero interest rate + quantitative easing", regional conflicts (Russia, Ukraine, and the Middle East continue to conflict)
Interest rate hike cycle and intensity: 16 months, 525bp.
It can be seen that the recent interest rate hike cycles are: 11-35 months
The interval between the last rate hike and the next rate cut in recent times: 8-14 months
So when do you think it is likely that interest rates will start to be lowered?
(Warm reminder: personal opinions are for reference only and are not used as investment basis) $ZEN $ZRO $YFI #非农就业数据即将公布 #币安合约锦标赛 #ASI代币合并计划
