Predicting the Markets

Chapter 1 Charts:
Predicting the Past
Yardeni Research, Inc.

October 18, 2023

Dr. Edward Yardeni

Chief Investment Strategist

Mali Quintana
Senior Economist
info@yardenibook.com

Please visit our sites at

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thinking outside the box

Table Of Contents Table Of Contents
Predicting the Past 1-11

October 18, 2023 / Chapter 1 Charts: Predicting the Past Yardeni Research, Inc.
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 Predicting the Past
Figure 1.
24 24
FEDERAL FUNDS RATE: 1970-1987
(percent, daily)
22 22

20 Burns Miller Volcker 20

18 18

16 16

14 14

12 12

10 10

8 8

6 6

4 4

yardeni.com
2 2
1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987

Note: Shaded areas denote terms of Fed Chairs.

Source: Federal Reserve Board.

Figure 2.
15 15
FEDERAL RESERVE
14
DISCOUNT RATE: 1970-1987 14
(percent, daily)

13 Burns Miller Volcker 13

12 12

11 11

10 10

9 9

8 8

7 7

6 6

5 5

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4 4
1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987

Note: Shaded areas denote terms of Fed Chairs.

Source: Federal Reserve Board.

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 Predicting the Past
Figure 3.
92 92
82 82
72 WEST TEXAS INTERMEDIATE CRUDE OIL PRICE: 1965-1985 72
62 (dollars per barrel, monthly, ratio scale) 62
52 52
42 42

32 32

22 22

12 12

yardeni.com
2 2
1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

Note: Shaded areas denote recessions according to the National Bureau of Economic Research.
Source: Haver Analytics.

Figure 4.
16 16
US CONSUMER PRICE INDEX: 1965-1985
(yearly percent change)
14 14

12 12
CPI
Headline
10
Core* 10

8 8

6 6

4 4

2 2

yardeni.com
0 0
1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

* Excluding food & energy.

Note: Shaded areas denote recessions according to the National Bureau of Economic Research.
Source: Bureau of Labor Statistics.

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 Predicting the Past
Figure 5.
18 18
US CONSUMER PRICE INDEX: 1970-1987
(yearly percent change)
16 16
Burns Miller Volcker
14 14

12 12

10 10

8 8

6 6

4 4

2 2

yardeni.com
0 0
1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987

Note: Shaded areas denote terms of Fed Chairs.

Source: Bureau of Labor Statistics.

Figure 6.
16 16
US TREASURY 10-YEAR BOND YIELD:
1970-1987
(percent, daily)
14 Burns Miller Volcker 14

12 12

10 10

8 8

6 6

yardeni.com
4 4
1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987

Note: Shaded areas denote terms of Fed Chairs.

Source: Federal Reserve Board.

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 Predicting the Past
Figure 7.
18 18
US TREASURY 10-YEAR BOND YIELD: 1962-1990
(percent, weekly)
16 16

14 14

12 12

10 10

8 8

6 6

4 4

yardeni.com
2 2
62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90

Source: Federal Reserve Board.

Figure 8.
20 20
US CONSUMER PRICE INDEX: 1962-1990
(yearly percent change, monthly)

15 15

10 10

5 5

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0 0
62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90

Source: Bureau of Labor Statistics.

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 Predicting the Past
Figure 9.
25 25
FEDERAL FUNDS RATE & DISCOUNT RATE: 1970-1987
(percent, daily)

20 20

15 15

10 10

5 Federal Funds Rate 5

Discount Rate

yardeni.com
0 0
1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987

Source: Federal Reserve Board.

Figure 10.
12700 12700
DOW JONES INDUSTRIALS AVERAGE: 1980-2000
10700 (daily, ratio scale) 10700

8700 8700

6700 6700

4700 4700

2700 2700

yardeni.com
700 700
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Source: Dow Jones Inc.

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 Predicting the Past
Figure 11.
3500 3500
DOW JONES INDUSTRIALS AVERAGE: 1980-1990
(daily)

3000 3000

2500 2500

2000 2000

1500 1500

1000 1000

yardeni.com
500 500
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

Source: Dow Jones Inc.

Figure 12.
18 18
US TREASURY 10-YEAR BOND YIELD: 1980-1990
(percent, daily)

16 16

14 14

12 12

10 10

8 8

yardeni.com
6 6
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

Source: Federal Reserve Board.

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 Predicting the Past
Figure 13.
13 13
FEDERAL FUNDS TARGET RATE: 1983-1990
(percent, weekly)

11 11

9 9

7 7

yardeni.com
5 5
1983 1984 1985 1986 1987 1988 1989 1990

Source: Federal Reserve Board.

Figure 14.
54 54
50 WEST TEXAS INTERMEDIATE CRUDE OIL PRICE: 1980-1990 50
46 (dollars per barrel, monthly, ratio scale) 46
42 42
38 38

34 34

30 30

26 26

22 22

18 18

14 14

yardeni.com
10 10
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

Note: Shaded areas denote recessions according to the National Bureau of Economic Research.
Source: Haver Analytics.

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 Predicting the Past
Figure 15.
3200 3200
DOW JONES INDUSTRIALS AVERAGE: 1987-1990
(daily)
3000 3000

2800 2800

2600 2600

2400 2400

2200 2200

2000 2000

1800 1800

yardeni.com
1600 1600
1987 1988 1989 1990

Source: Dow Jones Inc.

Figure 16.
11.0 11.0
US TREASURY 10-YEAR BOND YIELD: 1987-1990
(percent, daily)
10.5 10.5

10.0 10.0

9.5 9.5

9.0 9.0

8.5 8.5

8.0 8.0

7.5 7.5

7.0 7.0

yardeni.com
6.5 6.5
1987 1988 1989 1990

Source: Federal Reserve Board.

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 Predicting the Past
Figure 17.
4.5 4.5
LIVE BIRTHS
(millions, 12-month sum)

4.0 4.0

Jun
3.5 3.5
Greatest Generation Silent Generation
1910-1927 1928-1945
94-111 yrs old 76-93 yrs old
47 million 52 million

3.0 Baby Boomers Gen X Gen Y Gen Z Gen Alpha 3.0

1946-1964 1965-1980 Millenials 1997-2010 2011-2024
57-75 yrs old 41-56 yrs old 1981-1996 11-24 yrs old 2-10 yrs old
76 million 55 million 26-40 yrs old 57 million 28 million
62 million
2.5 2.5

yardeni.com
2.0 2.0
1909 1914 1919 1924 1929 1934 1939 1944 1949 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 2019 2024 2029

* Ages shown for each group are as of 2021. Annual data thru 1972, monthly data from 1973.
Source: National Center for Health Statistics, National Vital Statistics.

Figure 18.
52 52
THE AGE WAVE
(percent of labor force
50 16-34 years old) 50

48 1980 48

46 46

44 44

42 42

40 1962 40

38 38

36 36
Sep
yardeni.com
34 34
1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2017 2022 2027

Note: Oldest and youngest Baby Boomers turned 16 in 1962 and 1980, respectively.
Source: Bureau of Labor Statistics.

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 Predicting the Past
Figure 19.
14 14
UNEMPLOYMENT RATE & PERSONAL SAVING RATE: 1980-1999
(percent)
13 13

12 12
Personal Saving Rate
(12-month average)
11 11
Unemployment Rate
10 10

9 9

8 8

7 7

6 6

5 5

4 4

yardeni.com
3 3
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

Source: Bureau of Economic Analysis and Bureau of Labor Statistics.

Figure 20.
6 6
PRODUCTIVITY: NONFARM BUSINESS
(20-quarter percent change, annual rate)

4 4

2 2

Q2

yardeni.com
0 0
52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24 26

Note: Shaded areas are recessions according to the National Bureau of Economic Research.
Source: Bureau of Labor Statistics.

Page 10 / October 18, 2023 / Chapter 1 Charts: Predicting the Past Yardeni Research, Inc.
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 Predicting the Past
Figure 21.
7.0 7.0
FIXED-RATE 30-YEAR MORTGAGE INTEREST RATE*: 2005-2009
(percent, daily)

6.5 6.5

6.0 6.0

5.5 5.5

yardeni.com
5.0 5.0
2005 2006 2007 2008 2009

* Average conventional 30-year commitment rate.

Source: FHLMC Primary Mortgage Market Survey.

Figure 22.
350 350
FIXED-RATE 30-YEAR MORTGAGE INTEREST RATE: 2005-2009
(spread over US Treasury 10-year bond yield, basis points, daily)

300 300

250 250

200 200

150 150

100 100

yardeni.com
50 50
2005 2006 2007 2008 2009

Source: Haver Analytics.

Page 11 / October 18, 2023 / Chapter 1 Charts: Predicting the Past Yardeni Research, Inc.
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