S&P 500 Around the End of Fed Tightening

S&P 500 Around the End of Fed Tightening As the chart shows, the S&P 500 has performed well on average, around the end of Fed tightening. You may also like “S&P 500 Performance Around Previous Fed Cuts.” Picture source: Morphic Asset Management Pty Ltd

10Y-3M Treasury Yield Spread Adjusted for QE and QT

10Y-3M Treasury Yield Spread Adjusted for QE and QT Adjusted for quantitative easing (QE) and quantitative tightening (QT), the 10-year minus 3-month yield curve may have inverted in December 2018. Picture source: Morgan Stanley Wealth Management

S&P 500 Index vs. Global M1 Liquidity

S&P 500 Index vs. Global M1 Liquidity Another good correlation between the S&P 500 Index and global M1 liquidity, while the Fed plans to stop quantitative tightening. The money supply M1 is the amount of effective money in the economy. Picture source: Nordea and Macrobond

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…

Real Fed Funds Rate

Real Fed Funds Rate Real Fed funds rate is a key indicative factor, because it’s a very good measure of how tight or loose monetary policy is. Real Fed funds rate is the “true cost” of borrowing money. Recessions have always been preceded by a substantial tightening of monetary policy, which, in real terms, matter…