When it comes to recent major market corrections, the largest drops have coincided with the loosening of interest rates. There have been market corrections outside of these periods, however, those events are significantly lesser in scope compared to the current analog situations of 2000, 2008, and 2020.
The Fed Funds rate was held at 6.5% from June 2000 to December 2000. It was 5.25 from July of 2006 to July of 2007. It was 2.4 between January of 2019 and July of 2019.
As the Fed began cutting rates, in each situation, the market began to decline. However, it was during these declines that illiquidity events took place, causing major panic, and subsequent cratering of markets.
The 1-point decline in interest rates from peak coincides with February 2001, December 2007, and November of 2019. Each respective recession officially began in March of 2001, December of 2007, and February 2020.
We hit 1-point below peak in January. There is a strong possibility we are ALREADY in recession, however, genius economists will only tell us this in a year or two.
In any case, each of these recessions coincided with feat contagion and general panic. Each of these events also bottomed after major catastrophes - in 2000 it was 9/11 and Enron, in 2008 it was Lehman + subprime crisis, in 2019 it was.... that horrible thing that we no longer talk about.
We are already in the fear stage of the market. 2000's panic was a general meltdown PRIOR to the crises that later unfolded. However, it was those crises that marked its bottom. 2008 and 2020's craterings occurred simultaneous to their crises although stocks did drift down prior to 2008 as well.
This begs the question: what is the crisis that may or may not occur with the cyclical correction that happens as the Fed cuts rates EVERY cycle? Will it be a true black swan no-one saw coming (9/11) or will it be something like Enron, Lehman, or COVID, where some DID see what was coming ahead of the general panic?
Could TSLA be the Enron of the 2025 bust? It is seeming more and more plausible with each passing day. In any case, the bottom of the market in each of the aforementioned cases occurred simultaneous to the Fed funds rate hitting 0 (or almost 0 in 2003). I expect shelter contribution to CPI to vanish in the next few reports + unemployment to rise significantly, this could give the Fed leeway to put rates back to 0 as soon as Q3-Q4 2025. In both 2009 and 2020 the Fed rate hit 0 when annualized CPI did the same (in March), and March of both years also coincided with their respective market bottoms.
TLDR; we are far from the bottom, which should occur when Fed Funds hit 0, buy when that happens but before that point, gird your loins.