U.S. Long-Term Business Cycle and Fed Insurance Cut vs. Fed Recession Cut In recent history, when the U.S. long-term business cycle peaks in the 90th percentile and the Fed cut rates, a recession occurred. Image: Pictet Asset Management
Market Reaction to Fed Insurance Cuts vs. Fed Recession Cuts This chart shows the S&P 500 and 10-year Treasury Note response to Fed insurance cuts vs. Fed recession cuts. There is a big difference for equities, but not too much for bonds. Image: Pictet Wealth Management
10-Year U.S. Treasury Yield and Fed Insurance Rate Cut Chart suggesting a steeper yield curve and higher 10-year U.S. Treasury yields through mid-2020. Image: J.P. Morgan
S&P 500 Index and Fed Insurance Rate Cut Chart suggesting around 5% upside for the S&P 500 Index through mid-2020. Image: J.P. Morgan
U.S. Leading Economic Indicators (LEI) and Fed Insurance Rate Cuts This chart shows that Fed insurance rate cuts can be good news when the U.S. economy slows down. Image: Scotiabank
Fed Rate Cuts Priced In and Recession Insurance cuts or recessionary cuts? It usually doesn’t end well, when the bond market begins to price in more than three rate cuts over the next 6 months. Image: Societe Generale Cross Asset Research
S&P 500 and Past Easing Cycles The S&P 500 did rather well after easing cycles began, especially during Fed insurance cuts. You may also like “Market Reaction to Fed Insurance Cuts vs. Fed Recession Cuts.” Image: Fidelity Investments