What happened last time? › Inflation
What happens when inflation is above 10%?
It has happened 8 times since 1914. A year after it began, the S&P 500 was up 4 of 7 times, with a median move of +3.1%. On an ordinary day in the same years the median was +9.4%, up 69% of the time.
CPI inflation above 10% a year. Not true on 2026-09-25.
What came next
| 1 month later | 1 year later | 3 years later | |
|---|---|---|---|
| S&P 500 | -1.8% 14% up · n 7 · normal +1.1% | +3.1% 57% up · n 7 · normal +9.4% | +33.9% 100% up · n 7 · normal +25.7% |
| Gold | +0.2% 67% up · n 3 · normal 0.0% | +20.0% 67% up · n 3 · normal +2.9% | -9.3% 33% up · n 3 · normal +10.4% |
| Oil | +1.5% 67% up · n 3 · normal 0.0% | -1.1% 33% up · n 3 · normal 0.0% | -3.8% 33% up · n 3 · normal +8.9% |
| 10-year yield (pts) | -0.04 pts 33% up · n 3 · normal +0.01 pts | +0.54 pts 67% up · n 3 · normal +0.09 pts | +0.14 pts 67% up · n 3 · normal +0.06 pts |
| Inflation, CPI y/y (pts) | +0.37 pts 71% up · n 7 · normal 0.00 pts | -0.56 pts 38% up · n 8 · normal -0.00 pts | -5.33 pts 13% up · n 8 · normal -0.04 pts |
| Unemployment rate (pts) | +0.15 pts 75% up · n 4 · normal 0.00 pts | +1.85 pts 100% up · n 4 · normal -0.20 pts | +1.40 pts 100% up · n 4 · normal -0.40 pts |
Median move after each episode began, how often it rose, and how many episodes had data. "Normal" is the same move from any trading day in the same years.
Every time it happened
- 1981-08-25 · true for 83 trading days · S&P 500 a year later: -6.0%
- 1979-04-26 · true for 524 trading days · S&P 500 a year later: +3.1%
- 1974-03-21 · true for 316 trading days · S&P 500 a year later: -14.3%
- 1948-02-16 · true for 25 trading days · S&P 500 a year later: +4.3%
- 1946-09-16 · true for 355 trading days · S&P 500 a year later: -2.1%
- 1942-02-16 · true for 202 trading days · S&P 500 a year later: +24.7%
- 1941-12-16 · true for 24 trading days · S&P 500 a year later: +9.3%
- 1916-11-15 · true for 1186 trading days · S&P 500 a year later: –
- 8 separate episodes: a new one starts after 30 days without a match, so one long selloff counts once.
- Few episodes: read the ranges and the interval, not just the median.
- Try enough situations and one will look like an edge by chance.
- Macro numbers are as published at the time. Stocks include companies that later died.
More about inflation
- What happens when inflation is above 3%?
- What happens when inflation is above 4%?
- What happens when inflation is above 5%?
- What happens when inflation is above 6%?
- What happens when inflation is above 8%?
- What happens when inflation is below 1%?
- What happens during deflation (prices falling over a year)?
- What happens when core inflation is above 4%?