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2026-09-19

Fed First-Year Hikes Track the Starting CPI, Implying 200bps+ in the 2026 Cycle

Fed First-Year Hikes Track the Starting CPI, Implying 200bps+ in the 2026 Cycle

Key points

Starting CPI vs first-year Fed tightening (bps) across cycles, R²=0.82 | 2026's ~3.55% CPI maps to 200bps+ of hikes; 1980 an outlier near 600bps

Image source: @glocalinvestor