A new report by J.P. Morgan analyst John Normand assesses the impact of an imminent FOMC interest rate hike. Although Normand calls the first rate hike of the next tightening cycle “the most anticipated in history,” he believes that the fallout from the move will likely already be priced into global markets by the time the Fed pulls the trigger.

Macro Context

The last five Fed tightening cycles have lasted an average of 18 months each and have produced an average rate increase of 3.25 percent, or 0.20 percent per month. Normand notes that each of the Fed tightening cycles since 1983 has led to the collapse of a major asset market.

“In this cycle the Fed will be tightening into mild stagflation—perhaps the weakest growth but tightest labour market of any of the last five cycles,” he explains.

Bond Yields

According to the report, nominal 10-year rates begin…

Click here to continue reading

Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!