Our most recent research note examines the efficacy of various investment indicators during episodes of Fed tightening. Focusing on the last four episodes, we find that the record is mixed. Most investment indicators performed well during the tightening episodes of 1999 and 2004-2007, but not as well during the tightening episodes of 1994 and 2015-Present. We present intriguing evidence that the pattern of indicator alphas may hinge on credit conditions prior to the respective Fed tightening episodes.
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