Here's What Happened To Markets In 1994, When A Surprise Fed Move Caused Treasuries To Get Crushed

We've been seeing analysts increasingly talk about a "1994"-style situation playing out in the market.

What does that mean?

Basically, the market was caught off guard that year by a surprise Fed tightening, and Treasuries got hammered.

Nobody expects a real "tightening" soon, but there is more talk about it, and there's a lot of talk about a "Great Rotation" from fixed income back to equity (though that might also be wishful thinking, as opposed to actual prognostication).

Anyway, M&G Investments on Twitter has a great few tweets about what happened to other markets in 1994. It's all well and good to talk about a jump in rates and carnage in fixed income, but if your neck of the woods is no better, then it doesn't matter.

They observe.

As for the S&P 500, it gained 1.3% that year.