How long does it usually take for the labor market to ease after Fed hikes?


The effects of monetary policy are long and lagged.

Deutsche Bank has released a chart showing the unemployment rate over the past 13 rate hike cycles.

“Interestingly, 12 months after the first rise, all previous cycles have seen the unemployment rate either flat (1958-) or lower (all other 12),” writes FX analyst Jim Reid.

Although the cycle was much more aggressive than normal, it is only six months since the first ride.

Now normally the Fed starts to tighten as the economy heats up, but this time it waited until it was overheated, so there are differences; but employment is not the first place we should look for signs of a Fed pivot.

On the other hand, next week’s CPI data…

/American dollars

American dollars

The US dollar (symbol $, code USD) is the fiat currency of the United States of America (USD) and the most traded currency in the world. It was introduced to the United States in the late 18th century, with paper notes not being distributed until the following century. The US dollar, also known informally as the greenback, is the world’s primary reserve currency, largely due to the importance of the US economy on the world stage. Once backed by gold (in the 1900s), the USD is now a purely fiat currency, that is, not backed by a physical commodity. The old gold standard aligned with the US dollar made gold and silver legal tender in the United States, with the guarantee that 1 USD could be converted into one and a half grams of pure gold 24 carats. However, the link to gold was eventually abolished by President Richard Nixon in 1971. Since the removal of the gold standard, the US dollar has become the world’s premier reserve currency. This means that foreign nations hold large amounts of their cash reserves in USD, which accounts for approximately 65% ​​of global foreign exchange reserves. How to trade the US dollar? The US dollar is traded in a variety of ways, including in the foreign exchange (forex) market against other currencies; traded in pairs. Any retail broker offers exposure to USD in many trading pairs, given its popularity and liquidity. The USD is involved in the majority of the most traded currency pairs, such as EUR/USD, USD/JPY, GBP/USD and USD/CHF, known as the “four majors” , and “commodity pairs”. , i.e. AUD/USD, USD/CAD and NZD/USD.

The US dollar (symbol $, code USD) is the fiat currency of the United States of America (USD) and the most traded currency in the world. It was introduced to the United States in the late 18th century, with paper notes not being distributed until the following century. The US dollar, also known informally as the greenback, is the world’s primary reserve currency, largely due to the importance of the US economy on the world stage. Once backed by gold (in the 1900s), the USD is now a purely fiat currency, that is, not backed by a physical commodity. The old gold standard aligned with the US dollar made gold and silver legal tender in the United States, with the guarantee that 1 USD could be converted into one and a half grams of pure gold 24 carats. However, the link to gold was eventually abolished by President Richard Nixon in 1971. Since the removal of the gold standard, the US dollar has become the world’s premier reserve currency. This means that foreign nations hold large amounts of their cash reserves in USD, which accounts for around 65% of global foreign exchange reserves. How to trade the US dollar? The US dollar is traded in a variety of ways, including in the foreign exchange (forex) market against other currencies; traded in pairs. Any retail broker offers exposure to USD in many trading pairs, given its popularity and liquidity. The USD is involved in the majority of the most traded currency pairs, such as EUR/USD, USD/JPY, GBP/USD and USD/CHF, known as the “four majors” , and “commodity pairs”. , i.e. AUD/USD, USD/CAD and NZD/USD.
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