Inflation has come down a little but would still be hot enough to raise alarms in the Fed. Interest rates haven’t peaked yet. But a lot of money is riding on the tightening cycle being close to over.

Futures markets currently suggest that we’ve got another 0.75 percentage point left before the Fed declares victory. On the current slow rhythm, that’s another three policy meetings, which means money will get as tight as it gets in June.

That takes overnight lending costs to a little above 5.25%. While that feels incredible after over a decade of the economy fighting to support interest rates even a fraction above zero, we’re probably headed for that outcome in the next four months.

At best, if inflation drops over a cliff, the big money traders don’t think there’s any chance we’ll get out of this without at least two more small rate hikes. The Fed has already told us that much. We discount their clear statement at our peril.

So even in the best scenario, we’re going to be living in a 5% world soon. That means newly issued bonds will pay that much interest, even at the short end of the yield curve. Longer-term Treasury debt might even crack 6% for the first time in 20 years.

Back then, “maestro” Alan Greenspan pushed overnight rates all the way to 6.5% to eradicate wage inflation for a generation. This was well after the dot-com crash.

Arguably, if not for the 911 attacks, the recession that followed would have been relatively short . . . just a few months before recovery . . . and by our standards, it was extremely mild in any event.

In the 2000 boom, unemployment hit a low of 3.8%, which felt miraculous at the time but still a little higher than what the economy was able to support throughout 2019, before the pandemic changed the game.

Job losses took three years to settle, pushing unemployment to 6.3% in the process. It was a slow, gloomy era, especially in New York City, but people survived and eventually found jobs in new industries. Compared to the 2008 crash, when unemployment spiked to 10% and never dipped below 8% until late 2012, it was practically gentle.

A return to the Greenspan era takes the job market back to where it was in mid-2020, after the COVID layoffs . . . or maybe a better example is 2014, when the economy was still recovering from the credit crash.

Conditions like 2014 are survivable. And by December, rates are probably going to start edging down again. Can we live through another year of this? I don’t think it’s a question. We’ve already lived through much worse, including a year of extremely aggressive rate hikes.

Investors will find a way. You just need to keep your eyes open and maintain a reasonable expectation for how fast your want your money to work. Instant zero-rate millionaires aren’t being minted any more. Patience and discipline (and the right stocks) will get you there slower.

And keep some cash on hand. Six months of living expenses could really help pay the bills if you’re still working and in any danger of losing your paycheck before the Fed declares victory.