This chart shows the federal funds rate along with other economic indicators, with recessions highlighted in red and significant events written alongside them.
The Fed rate has a potential rise to 0.41. This would be the temp target for now in my opinion and further rise above this 0.41 signifies higher in the future.
FRED:FEDFUNDS
Every 100 basis points, is another $300 Billion in ANNUAL debt service payments.
The Fed is trapped.
Countdown to Perma-ZIRP begins at the next rate top. (Between 150 - 175 bps)
The Federal funds rate typically follows the treasury yield. With the treasury yield's lower high (LH) forming a down trend & is now approaching this resistance level again, there is a possibility for the Fed. to reverse on the current tightening of monetary policy.
this chart shows, how the moneyallocation rises while the fed highers yields.
The setup in RSI and the actual chartpattern has high similarities to the copper chart 2006, when Copper broke through a resistance and made exponential returns.
Now copper is again at a resistance, if it breaks through, we might see some crazy gains again.
The tangent line to the Federal Fund Rate of the past two debt cycles has only one tangent point to the curve identifiable in geometrical terms to 1974 12.90% Federal Fund rate.
To be clear what anyone can draw in geometrical terms as a tangent line to a curve, in math terms can be defined as the first derivative of the curve in that specific point.
The fact that...
The last three major crashes and recessions have been preceded by a period of interest rate hikes by the Fed.
Each hike since the 1970s has gotten less and less far before the economy rolled over, calling for an emergency rate cut.
There are many reasons for this, including the deflationary impact of demographics and globalisation, as well as the ever increasing...
This chart uses a simple downtrend in order to predict the terminal fed funds rate, which I believe will be 150-175 basis points by March 2023. As we can see, the previous fed funds rate hikes under the current downtrend have resulted in periods of lower GDP growth as well as yield-curve inversions and very regularly precede lows in total US jobless claims (the...
Simple late night doodles with some input of previous crashes from: fred.stlouisfed.org/series/FEDFUNDS and some simple trend following to suggest the increasing fragility of the effect that marginally increased rates may have on the economy.
FRED:FEDFUNDS
Increases in the US Fed Funds rate during the FED's hiking cycles have always preceded a recession.
A simple analysis of the most recent recessions, the amount of rate hikes preceding them and the downward trending channel in which FED Fund Rates have moved suggest the FED only has room for 150bp worth of hikes (or a total of 6 hikes).
Here is an interesting comparison of the 3 charts. If the history of these charts has taught us anything, there is going to be a rise in rates on a real rate basis more so than actual rates. What is more interesting is how this real rate rise will influence gold prices. Now gold isn't bitcoin, they are the exact opposite things. One is front-loaded with energy and...
Increases in the US Fed Funds rate during the FED's hiking cycles have always preceded a recession.
A simple analysis of the most recent recessions, the amount of rate hikes preceding them and the downward trending channel in which FED Fund Rates have moved suggest the FED only has room for 150bp worth of hikes (or a total of 6 hikes).
OANDA:SPX500USD FRED:FEDFUNDS
During periods of deep negative real rates gold tends to do very well.
The 1970's was a decade which saw big moves in real rates due as the Fed trying to combat the high inflation.
The more volatile the moves are in real rates, and the deeper into negative territory real rates go, the better gold performs.
We may be entering a similar period where the Fed is...
