After years of maintaining low interest rates and engaging in quantitative easing measures, the Fed may face increasing pressure to adjust its stance due to inflationary pressures and other macroeconomic concerns. The Fed has been forced to pivot eight times in the previous six decades. That is about 1.33 pivots per decade since the 1960s.

'...the Month-over-Month (MoM) leading indicator, currently at 1.2% (0.1% × 12), signals a potential fed pivot in 2023.'

First, let us discuss inflation. The Consumer Price Index (CPI) peaked at 9.1% in June and has since been on a monthly decline. tinyurl.com/3je5wp5w Inflation and interest rates tend to move in the same direction, with one often chasing the other as they rise and fall. However, the Year-over-Year (YoY) lagging indicator, currently at 5%, has yet to reach the Fed's 2% target rate. https://www.cnbc.com/2023/04/12/cpi-march-2023-.html On the contrary, the Month-over-Month (MoM) leading indicator, currently at 1.2% (0.1% × 12), signals a potential fed pivot in 2023.

'...the most recent pivot was in 2019. Two years into this decade means the probability of a pivot is now higher and growing with time.'

Another crucial factor is employment. January's historically low unemployment rate of 3.4%, the lowest since 1969, is a major reason why rates have yet to chase inflation down. https://www.cnbc.com/2023/02/03/us-unemployment-hit-a-historic-low-economists-arent-sure-itll-stick.html A strong labor market gives the Fed incentive to raise rates in pursuit of its 2% YoY inflation target. Nonetheless, the most recent pivot was in 2019. Two years into this decade means the probability of a pivot is now higher and growing with time.

Lastly, global economic conditions can also impact the Fed's decisions. If trade tensions escalate or geopolitical risks emerge, these could affect the U.S. economy and alter the Fed's strategy. Monitoring international developments is essential when assessing the probability of a policy change.

Determining the likelihood of a Fed pivot in 2023 involves examining multiple factors, such as inflation, employment and global macroeconomic conditions. Each decade, there is around a 13.33% probability of a pivot in a given year. The probability of a pivot in 2023 rises to 16.67% when excluding the first two years of the decade.

Write anything - from your smallest paragraph to your grandest masterpiece - and publish it online or send it as email newsletters directly to your readers.

Your Paragraph publication is blazing-fast, SEO optimized, and combines the best parts of both web2 and web3 to help you create content and grow your community better than ever.

Getting started

What you're looking at right now is the Paragraph editor. We support markdown, callouts, code, and rich media embeds like Twitter and YouTube.

paragraph.xyz

@paragraph_xyz

On http://paragraph.xyz, all posts are stored on @ArweaveTeam. This means they're immutable, uncensorable, permanent, and composable ✨

8

05:12 PM • Aug 18, 2022

When you publish a post, you'll have the option of sending it as a newsletter or storing it in the permanent & uncensorable Arweave.

Helpful links

Here's a few helpful pointers to customize your publication & get the most out of Paragraph:

• Theming & customization. Change your publication's font & colors; truly make this space your own.

• Set up a welcome email. This is the email your readers receive when they subscribe to your newsletter.

• Configure your publication's settings. Add links to your homepage, set up a custom domain, configure Google Analytics & more.

Need help or have feedback?

We've put together some documentation here, but if you still have questions you'd like answered we’d love to hear from you.

You can reach us via email at hello@paragraph.xyz or subscribe to our newsletter here. We're also pretty active on Discord.