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Thursday, March 28, 2024

Rate Hike Cycles vs. the US Dollar: Rate Hikes Bad for Gold?

Courtesy of Mish.

Here are two different looks at Fed rate hikes since Volcker. The charts are the same, but one presentation is a lot funnier than the other.

fed-funds-rate1

the above image from the New York Times article A History of Fed Leaders and Interest Rates.

Here’s an alternative view courtesy of @HedgeEye.

fed-rate-hikes-hedgeye

Let’s take the fist chart and see what correlations exist between rate hikes and the US dollar index.

Rate Hike Cycle vs. the US Dollar

fed-funds-rate-vs-dollar-index

Conventional wisdom suggests rate hikes will support the US dollar.


Continue reading here…

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