Fed funds rate → Net share hiking

Common explanation (Ripple · same direction): Once the Fed changes course, other central banks often follow.

This issue: Fed funds rate at 72 (warm), Net share hiking at 82 (hot) — both above normal, in line with the common explanation.

Hot and cold describe position, not good or bad: warm does not mean a fall is coming, and an extreme reading does not mean a quick reversal. We describe history only, with no buy or sell advice.

Where it stands now

Where the two indicators stand this issue

Fed funds rate: 1.31 percentage points above its 10-year average. Net share hiking: Now 33%.

Tests

Does this link hold up?

Common explanationOnce the Fed changes course, other central banks often followSource: Bank for International Settlements, “International monetary spillovers” (2015).
Tested against our dataAgreement between the positions of Fed funds rate and Net share hiking (6-month lag), measured in the direction of the common explanation: +0.19. Looking at every 5-year period (shifted one year at a time), the two moved in that direction in 36 of 47. Weak or inconsistent
Periods when it did not holdAcross 47 5-year periods, out of step in 1991⁠–⁠1999, 2000⁠–⁠2005 and 2009⁠–⁠2025.

History

The two lines, overlaid

Data: Federal Reserve H.15, via FRED (Federal Reserve Bank of St. Louis); Calculated by this site from BIS policy rates for about 40 central banks. Positions: our calculation.

Fed funds rateNet share hiking

Limits

What this card cannot tell you

Moving together does not prove that one causes the other.
Links change over time; periods when this one did not hold are listed in full.
This is the historical record, not a forecast.

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