ZH: Fed hike after a long pause? It's rare, but it happens

ZERO HEDGE writes:

Authored by Simon White, Bloomberg macro strategist

It’s unusual for the Federal Reserve to hike again after a pause as long as the current one. Nonetheless it does happen, favoring the risk-reward for the next move to be for higher rates.

The Fed has been on hold since its meeting in July.

The market is now gunning for greater interest-rate cuts, with 90 bps priced by the end of next year.

This hiatus of about 18 weeks would be historically the most likely outcome for the length of the current pause in rates.

I looked at all the times from 1971 when the fed funds effective rate had been held steady for at least 18 weeks, the last move was a hike, and then the Fed hiked rates again.

(Easier said than done to calculate given how erratic the rate was in the 1970s and 80s compared to the steady, smooth, generally well-telegraphed approach established by Alan Greenspan.)

The full post is here.