Fed rate hikes; then and now

2004

1.93%

1.69%

1.74%

2.29%

3.05%

3.27%

2.99%

2.65%

2.54%

3.19%

3.52%

3.26%

The inflation rate (CPI-U) when the Fed started its last rate hike cycle in July 2004.

2010

2.63%

2.14%

2.31%

The current sequence of CPI-U in 2010.

Checking my Universal Economic Calculator, I can see that the Treasury yield curve had the same shape then as now, and that the S&P 500 was on the same trajectory then as now.

During the last rate hike cycle, the S&P went up another 40% during the inflation run up. Real oil prices (which were tracking nominal prices) were at $40 then, and peaked at $140 before the crash.

Oil is $85 today, but oil is more constrained and there is a closer track between nominal and real price.

This time Things are Different! Really? Dunno, let us see how the central bank and the economy react this time. Given the recent crash, the economy is likely much more diligent today and more likely to cool down all by itself. I suspect the economy is pacing itself according to oil price.