CHART OF THE DAY: The Fed Always Cuts At/Near All-Time Highs

07/11/19 09:11AM EDT

Editor's Note: Below is a brief excerpt and chart from today's Early Look written by our Director of Research Daryl Jones. Click here to learn more about the Early Look.

CHART OF THE DAY: The Fed Always Cuts At/Near All-Time Highs - zath

One question we’ve been fielding from many investors recently relates to whether the Fed will cut when U.S. equity markets are at, or near, all-time highs.

As our ever data driven Senior Macro analyst Darius Dale highlighted during The Macro Show yesterday, the short answer is yes. This occurs frequently.

In fact, as the Chart of the Day below shows, this is almost always the case for initial interest rate cuts.  So, to the extent you think the stock market will prevent P.E. Powell from cutting rates, it will not.  Conversely, a market sell-off will almost certainly force his hand.  

CHART OF THE DAY: The Fed Always Cuts At/Near All-Time Highs - The Fed Always Cuts At Near All Time Highs

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