The first hike in the history of this commentary

And so here we are.

This blog is more than nine years old, and has never had the pleasure of commenting upon a Federal Reserve rate hike.  While that damning statistic says much about the world we live in, it also says something about the institution and its biases over the last several years.  Regardless, after 493 weeks (nearly double the previous record) we should all finally have a hike to talk about today.

Given that this is quite possibly the most anticipated rate hike in human history, there is little that Macro Man wishes to add to the veritable Everest of previews, thought pieces, moans, and cheers that have inundated anyone with even a cursory interest in economics or markets over the past days, weeks, and months.

Instead, he will leave you with some data to put the current situation, and perhaps the future, into context.

Table 1 displays the net change in several variables over the six months preceding every tightening cycle in your author's lifetime.   (A "tightening cycle" was actually quite ill-defined before the 1990's;  Macro Man has been quite conservative in his definition of a cycle.)

Table 2 displays the six month change in the same variables after the commencement of a new tightening cycle. 

There are a few points worth noting:

* Over the last three cycles, the USD strengthened into a rate hike and weakened after it.  The DXY has once again strengthened into this one.

* This is only the second time that stocks have fallen going into a tightening cycle.  The other was the rebound hikes five months after the '87 crash.  On average, stocks are flat for six months after a new cycle begins.

* This is the worst-ever performance for gold heading into a hiking cycle.

*  This is only the second time in the last 35 years that 10y yields have fallen in the six months heading into a rate hiking cycle.  The last cycle was the only one to see 10y yields decline in the six months after tightening began.

* Perhaps not coincidentally, the last cycle also demonstrated the largest flattening in the 2-10 curve before the hike.  The curve has flattened nearly as much this time around.  After tightening begins, the curve typically flattens more.

* This has been the worst performance for credit in the run-up to a tightening cycle in your author's lifetime- or at least as far back as the data goes.  Interestingly, spreads have tightened after the start of a tightening cycle on six of the seven occasions for which we have data.

* Labor markets (proxied by claims data) tend to perform as well after a tightening as before.  You probably don't need Macro Man to tell you that if the labor market breaks the pattern, the Fed will abandon its tightening.

All in, this looks like a fairly atypical run-up to a new cycle...which suggests that the follow-through could also be atypical.   Of course, there's a selection bias at work here; rate hikes that are swiftly unwound don't get counted as cycles.  Macro Man still thinks that this will turn out to be a cycle...but confesses that he would have been more confident in that view has that pulled their finger out 12-18 months earlier.

Good luck, and we'll see you on the other side.