Every Fed Tightening Cycle Has Preceded a Slowdown in the ISM Manufacturing Index Since 1950, pullbacks in the ISM Manufacturing Index has coincided with a recession or market selloff, except in 1995. Image: U.S. Global Investors
Prescient Economist & Fed Expert Paul McCulley on No Recession Ahead & Fed’s Tightening Done Paul Allen McCulley is an American economist, strategist and former managing director at PIMCO. He speaks with Consuelo Mack on WealthTrack about the Fed, credit bubbles, and why he does not expect a recession soon.
U.S. FCI Impulse on GDP Growth While tightening financial conditions may pose some challenges, the overall impact on U.S. economic growth in 2025 and 2026 is expected to be modest. Image: Goldman Sachs Global Investment Research
Fed Balance Sheet Goldman Sachs predicts the Fed will slow its balance sheet reduction in June 2025 and end quantitative tightening by September, which could influence market liquidity and interest rates. Image: Goldman Sachs Global Investment Research
Aggregate G6 Central Bank Balance Sheet The aggregate G6 central bank balance sheet is expected to continue decreasing in 2024 and 2025 as central banks unwind their pandemic-era asset purchase programs through quantitative tightening measures. Image: BofA Global Research
Interest Rates – Central Bank Policy Rate Hikes vs. Cuts Emerging market central banks typically take the lead in initiating monetary tightening and easing cycles. In 2024, their approach has shifted away from aggressive easing. Image: BofA Global Investment Strategy
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
S&P 500 vs. Overall Liquidity The tightening of liquidity remains a headwind for U.S. stocks. Image: Fidelity Investments
U.S. Fed Funds Rate and Financial Events History repeats itself over and over again, as Fed tightening cycles end with a financial event. Image: Deutsche Bank
S&P 500 Average Median and Positive Hit Rate of Monthly Returns Based on Credit/Fed Cycles Fed easing and credit tightening regime does not bode well for U.S. equities. Image: BofA US Equity & Quant Strategy
Fed Funds and Recessions Fed tightening over the past year is on an unprecedented scale. Image: Morgan Stanley Research