U.S. Core CPI Minus Unemployement Rate % vs. Fed Funds Rate The Fed rarely cuts rates when core CPI exceeds the unemployment rate, reflecting the central bank’s concern about potential inflationary pressures in the economy and its emphasis on price stability. Image: BofA Global Investment Strategy
Effective Fed Funds Rate and S&P 500 Index Return vs. 10-Year U.S. Treasury Bond Return Is 2024 poised to be the year for bonds, given that the median relative performance spread between stocks and bonds in previous Fed cutting cycles has been 25%? Image: Morgan Stanley Wealth Management
Fed Funds Rate vs. U.S. Job Openings (JOLTS) Declining wage growth and employment would allow the Fed to make substantial cuts in interest rates. Image: BofA Global Investment Strategy
Fed Funds Target Rate Goldman Sachs predicts that by the end of 2024, the federal funds rate will reach 5.1%, which differs significantly from the expectations of the futures market.. Image: Goldman Sachs Global Investment Research
S&P 500 Index Valuation vs. Fed Funds Rate Given that much of the stock market’s progress this year can be attributed to valuation expansion, it is likely that U.S. stocks will eventually experience a correction to adjust to the impact of higher interest rates. Image: Real Investment Advice
Fed Funds Rate Less U.S. Core PCE Is the Federal Reserve’s monetary policy really restrictive in order to return inflation to 2%? Image: Morgan Stanley Wealth Management
Inflation – Fed Funds Rate and CPI Will the Fed pause its rate hikes? Historically, Fed’s tightening cycles have ended when the federal funds rate is above CPI. Image: Carson Investment Research
Fed Funds Rate vs. Recessionary Bear Market Lows Fed rate cuts are historically not bullish for the S&P 500. Image: BofA Research Investment Committee
U.S. Commercial Banks and Savings Institutions Interest Income from Earnings Assets vs. U.S. Fed Funds Rate Does it really make sense to keep raising interest rates if U.S. commercial banks can’t survive with the current federal funds rate? Image: Gavekal, Macrobond
Fed Funds Rate Cuts and Max Drawdown S&P 500 Historically, Fed rate cuts are not bullish for the S&P 500. Image: Real Investment Advice