Hot inflation, tight labour market
In every month CPI inflation ran above 4% AND unemployment sat below 5%, what did the federal funds rate do over the following year?
6 windows met these conditions and completed 12 months. Federal Funds Rate was higher 12 months later in 5 of them and lower in 1. The middle half of outcomes fell between 0.43 and 2.42. 1 further window has not yet run their full horizon.
What followed, across 6 completed windows
- Higher after
- 5
- Lower after
- 1
- Middle half
- +0.43 to +2.42
- Full range
- -4.1 to +2.55
Change in Federal Funds Rate over the 12 months after each match. Windows are listed below so any one can be checked.
Term structure
Federal Funds Rate measured 1, 3, 6 and 12 months after each matched episode, with the count of completed windows at each horizon — not a forecast path, the same distribution above asked again at three more calendar distances.
| Horizon | N | Higher / lower | Middle half | Full range |
|---|---|---|---|---|
| 1m | 7 | 3 / 2 | -0.02 to +0.12 | -0.25 to +0.25 |
| 3m | 6 | 3 / 2 | -0.07 to +0.44 | -1.51 to +1.4 |
| 6m | 6 | 4 / 2 | -0.19 to +0.78 | -2.51 to +3.69 |
| 12m | 6 | 5 / 1 | +0.43 to +2.42 | -4.1 to +2.55 |
N is windows with a complete outcome at that horizon; a window that runs past the end of the record is excluded from it, not filled in. A horizon below the 5-window floor is marked thin the same way the 12 months result above is.
The conditions, in full
Generated from the same object that produced the numbers, so the description cannot drift from the computation.
- condition: CPIAUCSL year-over-year above 4
- condition: UNRATE below 5
- align: each condition is put onto the measured series' dates, taking the last observation on or before each, so windows and spans count in the measured series' own periods
- measure: FEDFUNDS over the following 12 observations
- matches within 3 observations count as one episode
Every matching window
7 episodes, each dated. Consecutive months meeting the conditions count once.
| Began | Ran for | Federal Funds Rate then | After | Change |
|---|---|---|---|---|
| May 1968 | 26 mo | 6.12 | 8.67 | +2.55 |
| Mar 1973 | 10 mo | 7.09 | 9.35 | +2.26 |
| Jan 2006 | 1 mo | 4.29 | 5.25 | +0.96 |
| Jun 2006 | 2 mo | 4.99 | 5.25 | +0.26 |
| Nov 2007 | 4 mo | 4.49 | 0.39 | -4.1 |
| Sep 2021 | 21 mo | 0.08 | 2.56 | +2.48 |
| May 2026 | 1 mo | 3.63 | — | still running |
Recompute this
Fetch CPIAUCSL FEDFUNDS UNRATE from the API or from FRED, apply each condition on the same dates, collapse consecutive matches, and measure the change over the following 12 months. The full rule is in the claims ledger.
This page counts and dates. It does not say what will happen next, and no window above is presented as more likely than another — MacroRadar publishes historical indicators, never forecasts.