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Is there a correlation between the Fed's interest rates and the price of the pie?

The interest rate cut is coming. Is it a good thing or a bad thing? Or is the higher liquidity brought by the interest rate cut actually good for the price of the pie? See what intuitive feelings you can find from historical data?

We grabbed the U.S. dollar interest rate and the price curve of the pie from 2010 to 2024, and looked at the trend of the pie price after each interest rate change.

We can see:

1. 2016-2018: The Federal Reserve began to raise interest rates from 0.5% to 2.25%. The price of the pie also experienced a significant increase during this period, from $500 to nearly $17,000. This suggests that during this period, pie prices were surging despite rising interest rates.

2. From 2018 to 2019, the Federal Reserve continued to raise interest rates, and the price of the pie dropped from a high of 17,000 to around US$3,400. During this period, the Fed stopped raising interest rates, and the price of the pie rebounded, returning from US$3,400 to around 11,000.

3. 2019-early 2020: The Federal Reserve begins to cut interest rates, from 2.25% to 0.25%. Flatbread prices fluctuated and fell back during this period.

4. From March 2020 to February 2022, the Federal Reserve maintained interest rates at 0.25%, and the price of the pie rose from around 8,000 to around 61,000;

5. In March 2022, the Federal Reserve entered the interest rate hike cycle again. The price of the pie fell from the high to around 16,000 in the early stage of the interest rate hike cycle, and then rose to around 71,000.

To summarize past data:

The first interest rate hike cycle: the market rose first and then fell;

The first interest rate cut cycle: the market goes sideways

The second interest rate hike cycle: the market fell first and then rose

During both periods when interest rates remain unchanged, the pie will rise;

If nothing else happens, the Federal Reserve will begin to cut interest rates in September this year. What do you think the trend of the pie will be like? Fall first and then rise? Or pull up after going sideways?

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