S&P 500 TTM YoY EPS vs. Fed Funds Target Traditionally, when the Fed starts cutting interest rates, corporate profits tend to decelerate. However, this’s not the case today, highlighting the unique economic landscape we face. Image: BofA US Equity & Quant Strategy
S&P 500 – Indexed Performance Until the summer, the S&P 500 achieved one of its best starts in history, closely following the trajectory of 1995. During that year, the Fed cut interest rates, marking the last soft landing in the U.S. economy. Image: Goldman Sachs Global Investment Research
Deviation of Earnings Above/Below Long Term Growth Trend Some investors are becoming concerned as the current earnings estimates deviate significantly from the long-term growth trend, along with the effect of a Fed rate-cutting cycle. Image: Real Investment Advice
Inflation – Potential Paths for U.S. Core CPI If the Fed cuts rates in June, U.S. core CPI is expected to exceed the Fed’s 2% inflation target, which could pose challenges for the central bank in maintaining price stability. Image: BofA Global Investment Strategy
S&P 500 vs. 1982 Analog With financial conditions easing considerably and the Fed set to cut rates in 2024, will the S&P 500 continue to track the 1982 analog? Image: Fundstrat Global Advisors, LLC
U.S. 10-Year Government Bond Annual Returns Never before has the 10-year U.S. Treasury bond experienced three consecutive years of annual declines. Is this time different? Image: BofA Global Investment Strategy
Fed Funds Pricing by FOMC Meeting Markets expect a Fed funds terminal rate at 3.25% and the Fed to cut rates in 2023. Image: BofA Global Research
Fed – Median U.S. CPI at the Start of the 13 Hiking Cycles Could the Fed cut rates even if inflation remains elevated? Image: Deutsche Bank
Fed Tightening and U.S. Recessions Should investors be worried when the Fed stops raising or cuts rates? Image: Goldman Sachs Global Investment Research
Asset Returns During Hiking Cycles Investors should worry when the Fed stops raising or cuts rates. Image: Goldman Sachs Global Investment Research