Below is a chart and excerpt from today's Early Look written by Macro & Housing analyst Josh Steiner. 

I found it interesting that in two-thirds of historical examples, Fed rate hikes have ended long before the bottom in market prices. Or said differently, markets continued to decline long after the Fed finished tightening.

As the market is still pricing in another pair of 50 bps hikes at the next two meetings – September and November – this would imply that the likely earliest bottom in prices would be in October-January, but more likely (based on the history) would not occur for a year or more after the Fed’s Final rate hike of this cycle.

It’s also worth noting that the trend has been higher over time. The four longest periods between peak Fed Funds and market troughs were the four most recent cycles.

CHART OF THE DAY: Fed Fund Effective Rates  - fff