The FOMC is set to announce its next interest rate policy decision tomorrow at 2 PM ET. After ten straight hikes, futures markets are currently pricing in a 91.9% chance that the Fed will leave rates unchanged for the first time since its January 2022 meeting, according to the CME’s FedWatch Tool.
We do a ton of analysis on historical performance around major market-moving events like Fed days. One data point you may or may not have noticed is that US equities have really struggled on Fed days recently. In fact, the S&P has averaged a one-day decline of more than 1% across the last six Fed days, and as shown in the chart below, those declines have primarily come in the final hour of trading following Fed Chair Powell’s press conferences.
In our newest B.I.G. Tips report for Bespoke Premium and Bespoke All Access subscribers, we provide an in-depth examination of the S&P 500’s performance on past Fed days since 1994. From the market’s resilience on Fed days during the 2022 bear market to the recent late-day slides on Fed days during the current bull, the narrative is as surprising as it is informative. This premium post offers not just important data but insightful charts that visualize the S&P’s average change and intraday paths on Fed days broken down by rate decision. We also explore the love-hate relationship the market has had with Fed Chair Jerome Powell as well as the late-day selling tendencies that have characterized his tenure. Unlock the rest of our newest B.I.G. Tips report with a one-month trial to Bespoke Premium for just $1. With Bespoke Premium, you’ll also receive our pre-market Morning Lineup, our daily Chart of the Day, our weekly Sector Snapshot, and our Bespoke Report newsletter published every Friday. Get started for just $1 today!