Fed Chair Janet Yellen last week signaled the U.S. central bank is on track to raise rates this year, despite a weak first quarter that some analysts believe could force the Fed to wait longer before starting
its first tightening cycle since 2004 - 2006.
The Fed embarked on
its first tightening cycle in more than a decade in December 2015.
Not exact matches
Using duration of the
tightening cycle or «time» as the benchmark (i.e. splitting up the various phases by 25 % increments), the S&P 500 was up an average 3.6 % (median +2.4 %); using «duration» or basis - point change as the benchmark, the
first 25 % of the
cycle sees an average gain of 7.2 % (median of +5.6 %).
Then there is the word «typically» like in «In fact, the
first 25 % of the
tightening cycle is typically the best part of the stock market
cycle».
Here's a nuance: in each of 1961, 1965, 1980, 1983 and 1987, the
first 25 % of the
tightening cycle was, in fact, the best part of the stock market
cycle.
That works well when interest rates are falling, or when the FOMC is on hold at the bottom of the
cycle, but once the hint that the
first tightening might occur, it doesn't work well until the
first loosening is hinted.