G4 Central Banks Monetary Policy Rate

G4 Central Banks Monetary Policy Rate If the trend in G4 central banks monetary policy rates continues, this chart suggests that we could see -4% in 2030. Picture source: Nordea and Macrobond

Fed Monetary Policy Rate Change over 6 Months Prices in (Futures) vs. Actual

Fed Monetary Policy Rate Change over 6 Months Prices in (Futures) vs. Actual Actually, the Fed decides when to raise rates, but the market decides when to cut rates. This chart shows that rate expectations are highly predictive six months in advance. You may also like “Markets Have Accurately Priced in Cuts before Easing Cycles…

Global Monetary Policy Map

Global Monetary Policy Map This chart shows that in 2019, central banks cut rates by most in a decade. Picture source: Topdown Charts

U.S. Monetary Policy and Recession

U.S. Monetary Policy and Recession This chart shows the U.S. monetary policy and two recession forecasting models over time (Fed policy rate, Atlanta Fed shadow Fed funds rate, nominal R-Star, Fed funds curve). Picture source: Fidelity Investments

Wage Growth, Monetary Policy and S&P 500

Wage Growth, Monetary Policy and S&P 500 When the spread between wage growth and the Fed funds rate is wide, it is generally positive for equities. Picture source: Topdown Charts

Markets Have Accurately Priced in Cuts before Easing Cycles Begin

Markets Have Accurately Priced in Cuts before Easing Cycles Begin Orange lines mark days when markets priced in a rate cut. In recent history, it occurs between 33 and 281 business days before fed cut. The average is 120 business days. So, the Fed’s rate cut could take place in September 2019. You may also…

Yield Curve vs. Real Fed Funds Rate

Yield Curve vs. Real Fed Funds Rate In modern history, every recession was preceded by an inverted yield curve and high real interest rates. When an inverted yield curve occurs, short-term interest rates exceed long-term rates. It suggests that the long-term economic outlook is poor and that the yields offered by long-term fixed income securities will…

Real GDP vs. Real Fed Funds Rate

Real GDP vs. Real Fed Funds Rate One of our most favorite charts is the real GDP vs. the real Fed funds rate (adjusted for inflation). Historically, recessions begin when the real Fed Funds rate exceeds GDP growth. We are far from that today. So, this cycle should not end any time soon. Real Fed…