Fed Watch: 7 charts on how assets perform when the Fed pauses
Markets are currently pricing a roughly 90% probability of a pause (or rather a skip) from the Fed today. We’ve conducted a chart-packed review of historical performance across asset classes around previous pauses. The conclusions are for you to make.
The short story is that basically everything …
1. S&P 500
The broad S&P 500 equity index has on average rallied on the back of Fed pauses in previous hiking cycles. This is likely due to expectations of a forthcoming change of policy and the prospect of laxer monetary conditions.