Ask HN: Doom and Gloom but financial markets doing well?

Re:Ask HN: Doom and Gloom but financial markets doing well? by spqrr on Saturday March 23, 2024 @08:53AM (#39799580)

Historically, a recession follows shortly AFTER the fed starts cutting rates. See also: https://fred.stlouisfed.org/series/T10Y2Y/ The grey areas are recessions.

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Re:Ask HN: Doom and Gloom but financial markets doing well? by fauigerzigerk on Saturday March 23, 2024 @09:02AM (#39799628)

>See also: https://fred.stlouisfed.org/series/T10Y2Y/ The grey areas are recessions

This chart shows (part of) the yield curve, not the Fed funds rate.

Did you mean to show this?

https://fred.stlouisfed.org/series/FEDFUNDS

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Re:Ask HN: Doom and Gloom but financial markets doing well? by spqrr on Saturday March 23, 2024 @09:12AM (#39799690)

I guess that would have been more correct, yes. It shows the same pattern in any case.

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Re:Ask HN: Doom and Gloom but financial markets doing well? by fauigerzigerk on Saturday March 23, 2024 @09:20AM (#39799737)

What it shows is that the Fed starts cutting rates shortly before or shortly after a recession begins, exactly as you would expect. In some cases they started raising again too early and had to backtrack.

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Re:Ask HN: Doom and Gloom but financial markets doing well? by wakawaka28 on Saturday March 23, 2024 @09:28AM (#39799784)

They often cut rates when a recession is in sight, and raise them when they think the market will handle it. I don't think cutting rates directly causes recessions. Interest rates are still too low but they are about to be cut to save the banks which invested in low interest bonds, presumably.

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