This post is dedicated to Frankie. I know you've had a bad year but hopefully you will redeem yourself one day.
A historical account of the past Fed hiking cycles. This includes the date of the last hike and the date of the first cut, followed by the date a recession occurs. I have produced a chart which dates back to 1957 and includes the 3 soft landings that occurred in 1966, 1984 and 1995. When a recession does occur, 5 out of 9 times it begins after the first Fed cut. It occurs only twice twice before the last rate hike.
I will emphasize the length of time that was required to bring the economy to a halt for the last 3 recessions prior to covid.
Gfc - the last hike occurred on July 2006 and the first cut was on Sept 2007, or over a year later. The economy went into a recession on Dec 2007 or 17 months after the last Fed hike.
Dotcom bubble - the last hike was on May 2000 and the first Fed cut on January 2001. The recession happened almost 1 year later on March 2001. (10 months from the last hike)
Gulf war recession - Inflation was very stubborn and remained around 5% for at least 2 years in 1989 and 1990. The last hike was on Feb 1989. The first cut was June of that year but it wasn't until about 1 year later that the economy tilted to a recession (17 months from the last hike)
Although the sample size is very small, it is reasonable to assume a recession may start at the end of 2024 or early 2025.
Last hike 1st cut Recession
Aug 1957 Nov 1957 Aug 1957
Oct 1959 June 1960 April 1960
Aug 1966 Sept 1966 -----------
Sept 1969 Oct 1969 Dec 1969
July 1974 July 1974 Nov 1973
Mar 1980 April 1980 Jan 1980
May1981 June 1981 July 1981
Aug 1984 Sept 1984 ------------
Feb 1989 June 1989 July 1990
Feb 1995 July 1995 -------------
May 2000 Jan 2001 Mar 2001
june 2006 Sept 2007 Dec 2007
July 2023 ? ?