S&P 500 Return – Equity Market Trends Around U.S. Capital Gains Tax Rate Hikes Equity prices tend to decline around U.S. capital gains tax hikes, but are likely to be short-lived. Image: Goldman Sachs Global Investment Research
Net Central Bank Interest Rate Hikes / Cuts Central banks haven’t cut this much since the global financial crisis. Image: BofA
Number of Fed Rate Hikes/Cuts Expected Over Next 12 Months Fed funds futures imply two further rate cuts over the next 12 months. Image: Credit Suisse Research
Impact of U.S. Corporate Tax Hike on S&P 500 This table suggests the impact on the S&P 500 if Joe Biden won the election and the Democrats swept both houses of Congress. Image: Societe Generale Cross Asset Research
Break-Even Inflation Rate On 10-Year TIPS and Fed Rate Cut (Hike) If inflation expectations continue to fall or remain low, the Fed could probably cut rates further. Image: Gavekal
Survey – When Is the Fed Most Likely to Raise Interest Rates? 43% of the respondents in the survey see the Fed lifting off in 2023, with another 39% projecting the first rate hike in 2024 or later. Image: J.P. Morgan
Net Global Central Bank Hikes/Cuts Global central banks haven’t cut this much since the Great Financial Crisis. Image: BofA Merrill Lynch Global Investment Strategy
Is Wall Street Overestimating Fed Rate Cut Odds? For the first time, the probability of a rate cut is above 80%, and the probability of a rate hike is 0%. Image: Bloomberg
Valuation – Average Forward P/E in Core PCE Inflation Ranges Since 1976 Historically, inflation generally had a negative impact on valuations when core PCE approached 2%, in the anticipation of rate hikes. Image: Goldman Sachs Global Investment Research
Fed Funds vs. Employment/Population + Inflation This chart suggests the optimal monetary policy, while Fed officials do not anticipate any rate hikes until 2022. Image: Oxford Economics