That's why the Fed needs to stop hiking before a system collapse

2022年7月20日

This is a quite interesting chart showing a ratio (black trend-line) of the Interest Rate, 5Y Yield and Federal Debt [(Fed Interest Rate*5-Year Treasury Maturity Rate)/200000*Federal (Total Public) Debt] trading within a Megaphone pattern since the 1990s. Its (Higher) Highs have naturally coincided with peaks in Rate Hikes (red trend-line). The last peak was on October 2018 and currently the ratio just broke within that range again (red area).

This shows that the Fed is on a timer and has only limited time to act and stop hiking before they jeopardize collapsing a system that is in place for three decades now and brings balance to the market. The S&P500 (blue trend-line) has seen great periods of growth and stability systemically with this in place as long as the Fed doesn't go off limits with hiking.

Do you also think its time they act now and stop or at least ease this round of hiking before total collapse?


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