The month of September often marks the beginning of a hiking cycle, where interest rates are adjusted meeting by meeting. However, is it possible to predict the future movements of the Federal Open Market Committee (FOMC)? In this blog post, we’ll explore the patterns and predictions after September, and what they could mean for the economy.

Firstly, let’s examine the concept of a “meeting-by-meeting hiking cycle.” This refers to the idea that the FOMC adjusts interest rates at each meeting, with the goal of maintaining inflation within a target range. By analyzing the historical data, we can identify patterns in the FOMC’s actions and make predictions about future movements.

One notable pattern is the failure of the “Even Odds” strategy. This refers to the tendency for the FOMC to hike interest rates at even-numbered meetings and cut them at odd-numbered meetings. However, we’ve failed at this strategy in recent months, with the FOMC opting to hike at both even and odd-numbered meetings. This could indicate a shift in the FOMC’s approach or a desire to maintain flexibility in their monetary policy.

Another important factor to consider is the timing of midterm elections. In recent years, the FOMC has tended to hike interest rates just before midterm elections, potentially as a way to boost economic growth and create a more favorable political environment for incumbent parties. This year’s midterms are only a week after the next FOMC meeting, which could indicate that the committee is planning another hike in the near future.

Finally, it’s worth noting the “Go Sept/Go Dec” philosophy, which suggests that the FOMC has a tendency to hike interest rates in September and December of each year. This pattern has held true for several years now, with the FOMC opting to hike in these months despite any changes in the economic landscape. While this doesn’t guarantee future hikes, it does suggest that the committee is likely to continue their current path of gradual rate increases.