What happened last time? › Inflation
What happens when inflation is below 1%?
It has happened 35 times since 1914. A year after it began, the S&P 500 was up 20 of 28 times, with a median move of +14.5%. On an ordinary day in the same years the median was +9.4%, up 69% of the time.
CPI inflation below 1% a year. Not true on 2026-09-25.
What came next
| 1 month later | 1 year later | 3 years later | |
|---|---|---|---|
| S&P 500 | +0.6% 54% up · n 28 · normal +1.1% | +14.5% 71% up · n 28 · normal +9.4% | +22.4% 89% up · n 28 · normal +25.7% |
| Gold | 0.0% 29% up · n 14 · normal 0.0% | 0.0% 21% up · n 14 · normal +2.9% | 0.0% 36% up · n 14 · normal +10.4% |
| Oil | 0.0% 36% up · n 14 · normal 0.0% | -3.1% 29% up · n 14 · normal 0.0% | -6.5% 36% up · n 14 · normal +8.9% |
| 10-year yield (pts) | +0.04 pts 68% up · n 19 · normal +0.01 pts | +0.26 pts 74% up · n 19 · normal +0.09 pts | +0.76 pts 84% up · n 19 · normal +0.06 pts |
| Inflation, CPI y/y (pts) | +0.30 pts 59% up · n 22 · normal 0.00 pts | +0.66 pts 63% up · n 35 · normal -0.00 pts | +1.48 pts 83% up · n 35 · normal -0.04 pts |
| Unemployment rate (pts) | 0.00 pts 43% up · n 21 · normal 0.00 pts | -0.50 pts 29% up · n 21 · normal -0.20 pts | -1.30 pts 24% up · n 21 · 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
- 2020-05-12 · true for 85 trading days · S&P 500 a year later: +41.6%
- 2016-07-15 · true for 44 trading days · S&P 500 a year later: +13.8%
- 2016-04-14 · true for 23 trading days · S&P 500 a year later: +11.8%
- 2015-01-16 · true for 274 trading days · S&P 500 a year later: -6.9%
- 2013-11-20 · true for 18 trading days · S&P 500 a year later: +15.2%
- 2009-01-16 · true for 231 trading days · S&P 500 a year later: +33.6%
- 1965-01-15 · true for 63 trading days · S&P 500 a year later: +8.5%
- 1964-11-16 · true for 21 trading days · S&P 500 a year later: +7.9%
- 1964-09-15 · true for 23 trading days · S&P 500 a year later: +7.9%
- 1963-10-16 · true for 21 trading days · S&P 500 a year later: +15.5%
- 1963-05-16 · true for 41 trading days · S&P 500 a year later: +15.4%
- 1963-03-18 · true for 19 trading days · S&P 500 a year later: +20.9%
- 1961-11-15 · true for 84 trading days · S&P 500 a year later: -16.3%
- 1961-07-17 · true for 21 trading days · S&P 500 a year later: -12.4%
- 1959-04-15 · true for 107 trading days · S&P 500 a year later: -0.9%
- 1954-05-17 · true for 526 trading days · S&P 500 a year later: +28.2%
- 1953-12-16 · true for 41 trading days · S&P 500 a year later: +39.9%
- 1953-08-17 · true for 61 trading days · S&P 500 a year later: +26.7%
- 1953-05-18 · true for 20 trading days · S&P 500 a year later: +16.6%
- 1953-01-15 · true for 61 trading days · S&P 500 a year later: -2.7%
- 1949-05-16 · true for 347 trading days · S&P 500 a year later: +23.3%
- 1944-05-16 · true for 76 trading days · S&P 500 a year later: +22.4%
- 1941-03-18 · true for 23 trading days · S&P 500 a year later: -18.5%
- 1940-10-16 · true for 99 trading days · S&P 500 a year later: -10.3%
- 1938-02-15 · true for 678 trading days · S&P 500 a year later: +13.7%
- 1936-03-17 · true for 127 trading days · S&P 500 a year later: +21.4%
- 1935-10-16 · true for 24 trading days · S&P 500 a year later: +43.8%
- 1929-10-16 · true for 1278 trading days · S&P 500 a year later: -38.9%
- 1926-08-16 · true for 894 trading days · S&P 500 a year later: –
- 1924-05-16 · true for 274 trading days · S&P 500 a year later: –
- 1921-02-15 · true for 675 trading days · S&P 500 a year later: –
- 1915-09-15 · true for 100 trading days · S&P 500 a year later: –
- 1915-04-15 · true for 27 trading days · S&P 500 a year later: –
- 1914-12-16 · true for 24 trading days · S&P 500 a year later: –
- 1914-05-16 · true for 24 trading days · S&P 500 a year later: –
- 35 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 5%?
- What happens when inflation is above 6%?
- What happens when inflation is above 8%?
- What happens when inflation is above 10%?
- What happens during deflation (prices falling over a year)?
- What happens when core inflation is above 4%?