Fed funds vs inflation 2021 to 2023

Brian Twomey Brian's Investment

March 2021, Inflation traded at 2.6 while the Fed Funds rate sat at 0.07. By January 2022, Inflation traded 7.5 Vs Fed Funds at 0.08. Inflation rose 4.9 points from 2.6 to 7.5. The first raise and successive raises began April 2022. True to form regarding the Fed is once interest rate changes began, successive adjustments occur.

The Fed's 525 point move brought an average Inflation rate move at -3.9. Fed Funds traded above Inflation May 2023 at Fed Funds 5.06 to Inflation 4.0. Inflation's successive drop happened June and July 2022 at Fed Funds 1.21 and 1.68 Vs Inflation at 9.1 and 8.5.

Fed Funds and Inflation correlate at -85% which means a Fed Cut may raise Inflation levels. The correlation however was factored only for this current reporting period and may not reveal perfect accuracy.

January 2022 = Fed Funds 0.08 Vs Inflation 7.5.

April 2022 = Fed Funds 0.33 Vs Inflation 8.3 and +0.8 from 7.5.

May 2022 = Fed Funds 0.77 Vs Inflation 8.6 and +0.3 from 8.3.

June 2022 = Fed Funds 1.21 Vs Inflation 9.1 and +0.5 from 8.6.

July 2022 = Fed Funds 1.68 Vs Inflation 8.5 and - 0.6 from 9.1.

August 2022 = Fed Funds 2.33 Vs Inflation 8.3 and -0.2 from 8.5

September 2022 = Fed Funds 2.56 Vs Inflation 8.2 and -0.1 from 8.3

October 2022 = Fed Funds 3.08 Vs Inflation 7.7 and -0.5 from 8.2.

November 2022 = Fed Funds 3.78 Vs Inflation 7.1 and -0.6 from 7.7.

December 2022 = Fed Funds 4.10 Vs Inflation 6.5 and -0.6 from 7.1.

2023.

January 2023 = Fed Funds 4.33 Vs Inflation 6.4 and -0.1 from 6.5.

February 2023 = Fed Funds 4.57 Vs Inflation 6.0 and -0.4 from 6.4.

March 2023 = Fed Funds 4.65 Vs Inflation 5.0 and - 1.0 from 6.0.

April 2023 = Fed Funds 4.83 Vs Inflation 4.9 and -0.1 from 5.0.

May 2023 = Fed Funds 5.06 Vs Inflation 4.0 and -0.9 from 4.9.

uly 2023 = Fed Funds 5.12 Vs Inflation 3.2 and -0.8 from 4.0.

August 2023 = Fed Funds 5.33 Vs Inflation 3.7 and +0.5 from 3.2.

Author

Brian Twomey

Brian's Investment

Brian Twomey is an independent trader and a prolific writer on trading, having authored over sixty articles in Technical Analysis of Stocks & Commodities and Investopedia.

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