What happened last time? › Inflation
What happens when inflation is above 5%?
It has happened 15 times since 1914. A year after it began, the S&P 500 was up 5 of 14 times, with a median move of -13.2%. On an ordinary day in the same years the median was +9.4%, up 69% of the time.
CPI inflation above 5% a year. Not true on 2026-09-25.
What came next
| 1 month later | 1 year later | 3 years later | |
|---|---|---|---|
| S&P 500 | +1.7% 64% up · n 14 · normal +1.1% | -13.2% 36% up · n 14 · normal +9.4% | +23.2% 79% up · n 14 · normal +25.7% |
| Gold | -2.1% 25% up · n 8 · normal 0.0% | -3.3% 38% up · n 8 · normal +2.9% | +22.5% 63% up · n 8 · normal +10.4% |
| Oil | -0.7% 13% up · n 8 · normal 0.0% | -7.5% 38% up · n 8 · normal 0.0% | +6.6% 63% up · n 8 · normal +8.9% |
| 10-year yield (pts) | -0.08 pts 25% up · n 8 · normal +0.01 pts | +0.31 pts 50% up · n 8 · normal +0.09 pts | -0.45 pts 50% up · n 8 · normal +0.06 pts |
| Inflation, CPI y/y (pts) | +0.24 pts 67% up · n 9 · normal 0.00 pts | +0.45 pts 60% up · n 15 · normal -0.00 pts | -1.94 pts 27% up · n 15 · normal -0.04 pts |
| Unemployment rate (pts) | 0.00 pts 44% up · n 9 · normal 0.00 pts | +0.10 pts 56% up · n 9 · normal -0.20 pts | +1.80 pts 78% up · n 9 · 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
- 2021-07-13 · true for 440 trading days · S&P 500 a year later: -13.0%
- 2008-07-16 · true for 65 trading days · S&P 500 a year later: -24.5%
- 1990-09-18 · true for 143 trading days · S&P 500 a year later: +21.5%
- 1990-02-21 · true for 59 trading days · S&P 500 a year later: +11.4%
- 1989-05-18 · true for 64 trading days · S&P 500 a year later: +11.5%
- 1977-02-18 · true for 1474 trading days · S&P 500 a year later: -12.5%
- 1973-05-22 · true for 906 trading days · S&P 500 a year later: -15.9%
- 1969-04-15 · true for 506 trading days · S&P 500 a year later: -14.6%
- 1951-01-15 · true for 309 trading days · S&P 500 a year later: +13.0%
- 1946-08-15 · true for 659 trading days · S&P 500 a year later: -13.4%
- 1943-10-16 · true for 23 trading days · S&P 500 a year later: +10.1%
- 1941-08-15 · true for 627 trading days · S&P 500 a year later: -14.5%
- 1937-06-15 · true for 25 trading days · S&P 500 a year later: -37.0%
- 1934-04-16 · true for 102 trading days · S&P 500 a year later: -23.7%
- 1916-04-15 · true for 1413 trading days · S&P 500 a year later: –
- 15 separate episodes: a new one starts after 30 days without a match, so one long selloff counts once.
- 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 6%?
- What happens when inflation is above 8%?
- What happens when inflation is above 10%?
- What happens when inflation is below 1%?
- What happens during deflation (prices falling over a year)?
- What happens when core inflation is above 4%?