It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of bullishness. -Charles Dickens
The two charts below show the US Fed Funds Rate and the Dow Jones Industrial Average from 1970-2016. Note the area of recessions and how they coincide with peaks in the US Fed Funds rate.
In short: We haven’t started a recession when the Fed Funds Rate was below 4-5%. Currently we are at 0.25-0.5 bps and there is a 95% chance the Fed will raise to 0.5-0.75 bps.
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