With yesterday’s favorable CPI report and the weaker October labor report released early this month, markets are growing convinced that the Fed has completed the rate hike cycle.
Assuming the last rate hike of the current cycle occurred on July 26 th , we are now 111 days past that event. The chart below produced by Bloomberg shows the median path of the S&P 500 around the last rate hike of each cycle since 1971. The data is segmented into cycles that produced recessions and those that did not. The S&P 500 is currently about 1.5% below its level on July 26 th when the Fed last hiked interest rates. Before the upswing began on October 28 th the S&P was down 9.8% from its level on
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