Chart of the day

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Today, Bernanke & Co. increased rates by 0.25% to 5.25% as expected. However, for the first time since it began the current tightening phase, the Fed did not say that it was actively considering another rate increase. Wall Street was positive on the dovish stance and the stock market surged over 2% on the day. For some perspective, today's chart (which is updated through July since the Fed won't meet again until August) illustrates the average change (blue line) in the fed funds rate following a major bottom. While the last Fed tightening cycle (gold dashed line) fell a touch short of average, this tightening cycle has already witnessed a run that is a touch more than average.