What changes – More fiscal, which means V-shaped cycles
TIME FROM THE RECESSION END TO THE FIRST HIKE
20
20
PRE-1985 AVERAGE: 9 MONTHS <= => POST-1985 AVERAGE: 42 MONTHS
18
18
16
16
PRIOR TO 1987 ACTUAL FED FUNDS RATE, ROUNDED TO THE NEAREST ¼%. THEN THE FED TARGET RATE. NOW THE FED FUND CEILING. NUMBERS SHOW NUMBER OF MONTHS FROM END OF RECESSION TO THE FIRST FED HIKE.
14
14
12
12
10
10
3
8
8
15
6
6
4
4
28
7
34
2
2
32
0
0
1 2
78
24
55 60 65 70 75 80 85 90 95 00 05 10 15 20 25
1
Sources: Federal Reserve, NBER
52
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