Wednesday, September 16, 2015

TIME FROM FED RATE HIKE INITIATION TO RECESSION

There is an interesting article on the increase in interest rates by the Fed and the start of recessions.*  The shortest time from the beginning of Fed rate hikes to a recession was 11 mo. for the Fed rate hike periods of August 1980 to December 1980.  The longest time from the beginning of Fed rate hikes to a recession was 86 mo. for the Fed rate hike periods of May 1983 to August 1984. 1980.  For the two most recent rate hike periods, the June 1999 Fed rate hike to May 2000 recession took 21 months and the June 2004 to June 2006 Fed period took 42 months to recession.  So it may take well more than a year to go to a recession and could easily be 2 or 3 years.

(Click on table to enlarge)

* http://www.cnbc.com/2015/09/15/when-the-fed-raises-rates-heres-what-happens.html

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