Slope of Hope Blog Posts

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Fed Repeats 1999 (by LZ)

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The 12-year cycle of animals is the most popular aspect of the Chinese zodiac. This year 2023 is one, and prior ones were in 2011, 1999, 1987 and 1975. All of these years have some relevance to this year. A lesser bear market cycle ended in 1974 (it was the nominal low, but not the inflation-adjusted low). In 1975, stocks rallied hard. They recovered almost all their losses by early 1976. The bear was caused by shockingly high inflation, similar to what was experienced last year.

The year 1987 was in the middle of a bull market, but interest rate hikes helped turn a big rally into a big crash. This seems like the least relevant of the four prior rabbits, but if the Fed started hiking again maybe not.

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