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Chart of the Week
Rates Are a’Changin’
Last week, the Fed approved a 75 bps hike, driving interest rates to their highest level since 2008. Though rates have risen sharply, G10 hiking cycles lasted just over 15 months on average. When they do end, relatively large cuts tend to arrive soon after. In about 75% of cycles with major central banks, there was a rate cut within a year of the last hike. Though it may be early for the Fed to consider pausing, we may start to see a slowdown in the pace of hikes soon.
Source: Haver Analytics, GS Global Investment Research, and GS Asset Management.