How US sectors performed when Fed policy was very restrictive
Since 2 Jan 1985, the record reads this regime on 11.4% of trading days, across 5 episodes with a typical run of 183 sessions. Across those sessions since 22 Dec 1998, Energy did best at +18.4% a year and Consumer Staples did worst at +0.8%, against +14.4% 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 |
|---|---|---|---|---|---|---|
| Energy XLE | +18.4% | +10.1% | +12.4% | 50% | 24.5% | 762 |
| Information Technology XLK | +15.6% | +11.8% | +9.6% | 54% | 32.8% | 762 |
| Industrials XLI | +12.5% | +9.2% | +6.6% | 55% | 19.4% | 762 |
| Health Care XLV | +8.1% | +8.8% | +2.2% | 51% | 20.9% | 762 |
| Materials XLB | +6.5% | +8.6% | +0.6% | 48% | 25% | 762 |
| Utilities XLU | +6.3% | +5.7% | +0.3% | 51% | 19.5% | 762 |
| Financials XLF | +5.4% | +7.9% | -0.5% | 48% | 26.7% | 762 |
| Consumer Discretionary XLY | +3.3% | +10.6% | -2.7% | 49% | 24.6% | 762 |
| Consumer Staples XLP | +0.8% | +5.6% | -5.2% | 49% | 19.6% | 762 |
| Communication Services XLCsince 2018 | — | +11.3% | — | — | — | 0 |
| Real Estate XLREsince 2015 | — | +5.5% | — | — | — | 0 |
Context
| Asset | In this regime | All days | vs S&P 500 | Up sessions | Volatility | Sessions |
|---|---|---|---|---|---|---|
| S&P 500 SPY | +14.4% | +10.1% | — | 52% | 19.9% | 1,199 |
| Nasdaq 100 QQQsince 1999 | +22.2% | +12.9% | +18.3% | 55% | 40.1% | 710 |
| Russell 2000 IWMsince 2000 | +8.9% | +9.6% | +5.8% | 54% | 22.6% | 416 |
| Long Treasuries TLTsince 2002 | +1.4% | +1% | -4.8% | 48% | 8.7% | 240 |
| Gold GLDsince 2004 | +27.9% | +11.4% | +21.7% | 56% | 15.7% | 240 |
How this regime is defined
Monetary policy reads Very 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 very restrictive?
- Energy +18.4%, Information Technology +15.6%, Industrials +12.5%. Annualised mean next-session returns since 22 Dec 1998; the S&P 500 returned +14.4%.
- How common is this regime, and how long does it last?
- It appears on 11.4% of trading days since 1985, in 5 separate episodes. The typical run is 183 sessions; the longest lasted 696 sessions.
- Is this regime in force today?
- No. It was last seen 29 Aug 2007 – 18 Oct 2007. 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.