The Bulk Of Losses Come After The Fed Stops Hiking

Danielle Park, CFA profile picture
Danielle Park, CFA
4.93K Followers

Summary

  • December 14 is expected to mark the US Fed’s 7th consecutive rate hike this cycle with a 50bp increase that will take the Fed funds rate to 4.25-4.50%, the highest since December 2007.
  • Higher short-term rates increase cash and bond yields to the benefit of savers. For debtors, real estate and equity owners, the opposite is true.
  • This time, a median price drop of 26% would only take US national home prices back to where they were in the fall of 2020. That would be a modest retreat in the big picture.

crash of the stock exchanges

franckreporter

December 14 is expected to mark the US Fed’s 7th consecutive rate hike this cycle with a 50bp increase that will take the Fed funds rate to 4.25-4.50%, the highest since December 2007. Chair Powell says they intend to hike

10-yr Treasury constant maturity minus 3-month Treasury constant maturity

S&P 500 vs. US 10-yr bond returns following Fed pivots

Fastest housing slowdown on record

US median housing payment as % of median income

This article was written by

Danielle Park, CFA profile picture
4.93K Followers
Portfolio Manager, financial analyst, attorney, finance author, a regular guest on North American media. Danielle Park is the author of the best selling myth-busting book “Juggling Dynamite: An insider’s wisdom on money management, markets and wealth that lasts,” as well as a popular daily financial blog:www.jugglingdynamite.com Danielle worked as an attorney until 1997 when she was recruited to work for an international securities firm. A Chartered Financial Analyst (CFA), she now helps to manage millions for some of Canada's wealthiest families as a Portfolio Manager and analyst at the independent investment counsel firm she co-founded Venable Park Investment Counsel Inc. www.venablepark.com. For two decades, Danielle has been writing, speaking and educating industry professionals and investors on the risks and realities of investment behaviors. A member of the internationally recognized CFA Institute, Toronto Society of Financial Analysts, and the Law Society of Upper Canada. Danielle is also an avid health and fitness buff.

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