How US sectors performed when the Fed was very restrictive and inflation high
Since Jan 3, 1983, the record reads this regime on 17.6% of trading days, across 213 episodes with a typical run of 7 sessions. Across those sessions since Dec 22, 1998, Energy did best at +27.2% a year and Information Technology did worst at -30.9%, against +5.4% for the S&P 500.
Figures as of Sep 23, 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 | +27.2% | +10.2% | +34.1% | 51% | 24.1% | 594 |
| Communication Services XLCsince 2018 | +15.5% | +12.3% | +12.8% | 51% | 16.4% | 131 |
| Materials XLB | +12.8% | +8.5% | +19.7% | 49% | 24.9% | 594 |
| Financials XLF | +6.9% | +7.8% | +13.8% | 49% | 25.5% | 594 |
| Industrials XLI | +3.4% | +9.4% | +10.3% | 51% | 19.4% | 594 |
| Utilities XLU | +1.4% | +5.4% | +8.3% | 51% | 18.8% | 594 |
| Consumer Discretionary XLY | +1.2% | +10.4% | +8.1% | 50% | 24.3% | 594 |
| Consumer Staples XLP | +0.3% | +5.3% | +7.2% | 50% | 19.6% | 594 |
| Health Care XLV | -7.5% | +8.5% | -0.6% | 47% | 19.9% | 594 |
| Real Estate XLREsince 2015 | -23.3% | +5% | -26% | 49% | 18% | 131 |
| Information Technology XLK | -30.9% | +12.4% | -24% | 51% | 31.2% | 594 |
Context
| Asset | In this regime | All days | vs S&P 500 | Up sessions | Volatility | Sessions |
|---|---|---|---|---|---|---|
| S&P 500 SPY | +5.4% | +10.2% | — | 53% | 17.2% | 1,046 |
| Nasdaq 100 QQQsince 1999 | -17.8% | +13.4% | -8.7% | 53% | 38% | 550 |
| Russell 2000 IWMsince 2000 | -22.1% | +9.8% | -2.4% | 47% | 23.4% | 345 |
| Long Treasuries TLTsince 2002 | -21.1% | +1% | -23.9% | 47% | 14.3% | 219 |
| Gold GLDsince 2004 | +11.4% | +11.7% | +7.5% | 52% | 14.8% | 217 |
How this regime is defined
Fed policy reads very restrictive while inflation reads high or extreme.
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 the Fed was very restrictive and inflation high?
- Energy +27.2%, Materials +12.8%, Financials +6.9%. Annualised mean next-session returns since Dec 22, 1998; the S&P 500 returned +5.4%.
- How common is this regime, and how long does it last?
- It appears on 17.6% of trading days since 1983, in 213 separate episodes. The typical run is 7 sessions; the longest lasted 60 sessions.
- Is this regime in force today?
- No. It was last seen Nov 1, 2024 – Nov 7, 2024. 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.