It’s funny, re: those graphs (that are currently doing the rounds) about “markets often rally when the Fed goes on pause”, because we also have lots of them to say something like “markets usually perform well at the start of a tightening cycle”, predicated on the idea that rates are going up b/c growth/profits are strong.

You can see this below, set to the “start” (0) and indexed at 250 days before.

The below shows the experience across a range of different markets.

So, strategists seem to have their bases covered. Markets rally at the start of the cycle, markets rally at the end of the cycle (!), clearly always a good time to be invested!

We say that “tongue-in-cheek”. To rally at the end of the cycle is a much less likely prospect, in our view, and clearly requires a “soft landing”, which we know is historically very difficult to achieve.

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