How US sectors performed when Fed policy was restrictive
Since 2 Jan 1985, the record reads this regime on 11.4% of trading days, across 11 episodes with a typical run of 40 sessions. Across those sessions since 22 Dec 1998, Industrials did best at +20.3% a year and Health Care did worst at +7%, against +15.6% for the S&P 500.
Figures as of 6 Nov 2026 · recomputed every trading day
The regime in the record
Sector by sector
Annualised mean return on the session after each regime day. Sorted by the regime figure.
| Asset | In this regime | All days | vs S&P 500 | Up sessions | Volatility | Sessions |
|---|---|---|---|---|---|---|
| Communication Services XLCsince 2018 | +23.4% | +11.3% | +5.2% | 56% | 16.6% | 715 |
| Industrials XLI | +20.3% | +9.2% | +4.5% | 54% | 18.1% | 1,139 |
| Financials XLF | +18% | +7.9% | +2.2% | 54% | 20.8% | 1,139 |
| Materials XLB | +16.8% | +8.6% | +1% | 53% | 20.6% | 1,139 |
| Consumer Discretionary XLY | +16% | +10.6% | +0.3% | 54% | 20.8% | 1,139 |
| Energy XLE | +16% | +10.1% | +0.2% | 55% | 23.5% | 1,139 |
| Utilities XLU | +14.7% | +5.7% | -1.1% | 54% | 16.3% | 1,139 |
| Information Technology XLK | +12.8% | +11.8% | -2.9% | 57% | 26.1% | 1,139 |
| Consumer Staples XLP | +11.2% | +5.6% | -4.6% | 53% | 12.9% | 1,139 |
| Health Care XLV | +7% | +8.8% | -8.8% | 51% | 14.5% | 1,139 |
| Real Estate XLREsince 2015 | +5.6% | +5.5% | -12.6% | 52% | 16.8% | 715 |
Context
| Asset | In this regime | All days | vs S&P 500 | Up sessions | Volatility | Sessions |
|---|---|---|---|---|---|---|
| S&P 500 SPY | +15.6% | +10.1% | — | 56% | 16.7% | 1,200 |
| Nasdaq 100 QQQsince 1999 | +10.9% | +12.9% | -4.9% | 56% | 27.2% | 1,139 |
| Russell 2000 IWMsince 2000 | +13.2% | +9.6% | -1.9% | 52% | 22% | 1,125 |
| Long Treasuries TLTsince 2002 | -1.6% | +1% | -20.4% | 51% | 13.4% | 1,035 |
| Gold GLDsince 2004 | +30% | +11.4% | +11.2% | 56% | 20.9% | 1,035 |
How this regime is defined
Monetary policy reads Restrictive in the daily regime record.
Method and limits
Descriptive statistics over the published regime record — not a backtest, a forecast or advice. Each regime day is credited with the NEXT session's return, so a regime never earns the move that revealed it. Returns are ETF price returns (dividends excluded), annualised as 252 × the mean session return; volatility likewise. Sector funds start in December 1998 (Real Estate in 2015, Communication Services in 2018); the regime record starts in 1980. Labels are the engine's as currently published and are recomputed when its method improves. A figure with fewer than 60 sessions is not shown.
This page's data as JSONQuestions
- Which sectors did best when Fed policy was restrictive?
- Industrials +20.3%, Financials +18%, Materials +16.8%. Annualised mean next-session returns since 22 Dec 1998; the S&P 500 returned +15.6%.
- How common is this regime, and how long does it last?
- It appears on 11.4% of trading days since 1985, in 11 separate episodes. The typical run is 40 sessions; the longest lasted 697 sessions.
- Is this regime in force today?
- No. It was last seen 3 Jul 2023 – 13 Apr 2026. The daily nine-axis reading is on the Regime Radar.
- Is this a backtest?
- No. It describes how assets behaved on the session after each day the regime was read, with no portfolio, costs or selection. A backtest would test a rule; this records a history.