What happened last time? › Interest rates
What happens when the Fed funds rate is above 5%?
It has happened 15 times since 1954. A year after it began, the S&P 500 was up 11 of 15 times, with a median move of +10.9%. On an ordinary day in the same years the median was +10.4%, up 74% of the time.
Fed funds rate above 5. Not true on 2026-09-25.
What came next
| 1 month later | 1 year later | 3 years later | |
|---|---|---|---|
| S&P 500 | +1.8% 60% up · n 15 · normal +1.1% | +10.9% 73% up · n 15 · normal +10.4% | +2.1% 60% up · n 15 · normal +27.0% |
| Gold | -0.6% 33% up · n 15 · normal 0.0% | +9.7% 73% up · n 15 · normal +2.9% | +28.0% 80% up · n 15 · normal +10.4% |
| Oil | 0.0% 27% up · n 15 · normal 0.0% | +1.6% 60% up · n 15 · normal 0.0% | +52.2% 87% up · n 15 · normal +8.9% |
| 10-year yield (pts) | -0.07 pts 47% up · n 15 · normal +0.01 pts | +0.14 pts 60% up · n 15 · normal +0.10 pts | +1.02 pts 53% up · n 15 · normal +0.04 pts |
| Inflation, CPI y/y (pts) | +0.06 pts 53% up · n 15 · normal -0.00 pts | +0.11 pts 53% up · n 15 · normal +0.05 pts | +1.64 pts 53% up · n 15 · normal -0.03 pts |
| Unemployment rate (pts) | -0.10 pts 33% up · n 15 · normal 0.00 pts | -0.30 pts 7% up · n 15 · normal -0.20 pts | -1.00 pts 40% up · n 15 · 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
- 2023-05-04 · true for 346 trading days · S&P 500 a year later: +26.3%
- 2006-05-12 · true for 305 trading days · S&P 500 a year later: +16.6%
- 1999-06-28 · true for 421 trading days · S&P 500 a year later: +9.0%
- 1999-02-16 · true for 8 trading days · S&P 500 a year later: +11.7%
- 1994-11-09 · true for 995 trading days · S&P 500 a year later: +27.5%
- 1994-09-30 · true for 1 trading day · S&P 500 a year later: +26.3%
- 1994-06-30 · true for 2 trading days · S&P 500 a year later: +22.6%
- 1977-04-29 · true for 3670 trading days · S&P 500 a year later: -1.6%
- 1977-03-23 · true for 1 trading day · S&P 500 a year later: -10.8%
- 1976-12-29 · true for 1 trading day · S&P 500 a year later: -10.7%
- 1976-03-01 · true for 120 trading days · S&P 500 a year later: +0.6%
- 1972-08-16 · true for 801 trading days · S&P 500 a year later: -8.4%
- 1971-06-21 · true for 86 trading days · S&P 500 a year later: +10.9%
- 1968-03-14 · true for 658 trading days · S&P 500 a year later: +11.0%
- 1966-05-19 · true for 132 trading days · S&P 500 a year later: +8.3%
- 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 interest rates
- What happens when the 10-year Treasury yield is above 5%?
- What happens when the 10-year Treasury yield is above 8%?
- What happens when the 10-year Treasury yield is below 2%?
- What happens after the 10-year yield rises 1 point in a year?
- What happens after the 10-year yield rises 2 points in a year?
- What happens after the 10-year yield falls 1 point in three months?
- What happens when the 2-year Treasury yield is above 5%?
- What happens when the 30-year Treasury yield is above 5%?