Will history repeat?
The last time the Federal Reserve’s federal funds rate and inflation rose, auction activity subsequently fell.
Bar graph titled. Light blue bars represent “Auction volume (per six months, in billions)”; a red trend line represents “Inflation”; and a blue trend line represents “Fed funds rate.” The x-axis displays years 2015 to 2022 and the y-axis displays the dollar amount of auction activity in billions. Auction activity volume is shown to have fluctuated every year, with its lowest dollar amount in 2020, during the pandemic. For 2022, the auction activity dollar amount has reached ~$5.7 billion, while inflation is at 8.29% and fed funds are at 0.45%. Source reads, “Chart courtesy of LiveArt, LLC. Sources — Auction volume: Live Art, LLC, 2022; Inflation: Bureau of Labor Statistics; Fed funds rate: New York Federal Reserve, 2022. All data as of June 30, 2022.” Overall, this graph is showing even though inflation and fed funds have risen, that auction activity is strong in 2022 compared to past years — but it still has the potential to decrease, which would coincide with previously noted trends.