The U.S. macro regime on November 28, 2025, is characterized by accelerating growth and inflation, tight financial conditions, a flat yield curve, and compressed credit spreads.
– **Macro regime**: Growth acceleration and inflation reacceleration indicate a dynamic economic environment.
– **Financial conditions**: Tight, with a slight easing compared to last week.
– **Yield curve**: Flat, suggesting cautious macro expectations despite growth acceleration.
– **Credit regime**: Compressed with low percentile and negative z-score, indicating strong risk appetite.
– **Changes from past**: The most notable change is in the credit market, with further compression in spreads.
## 1. Growth × Inflation: Growth Accelerating × Inflation Reaccelerating
The current growth and inflation regime signals an environment where both economic growth and inflation are gaining momentum. The year-over-year growth of industrial production stands at 1.18%, with a 3-month acceleration of 0.84 percentage points, showing a robust growth pace. Meanwhile, the core CPI’s year-over-year change is 3.11%, alongside a 3-month inflation acceleration of 0.35 percentage points. This regime has not changed from the previous week, indicating a continuation of the current economic cycle phase, often associated with mid- to late-cycle dynamics.
## 2. Financial Conditions: Tight
The financial conditions are labeled as tight, reflected in the policy rate at 4.09% and the 2-year yield at 3.47%. The financial conditions score of 0.87, though slightly lower than last week’s 0.89, still indicates a restrictive environment. This tightness acts as a brake on the economy, especially in the context of accelerating growth and inflation, potentially curbing overheating risks.
## 3. Yield Curve: Flat
A flat yield curve, with a spread of 0.20 percentage points between the 10-year and 3-month yields, suggests cautious expectations for future economic growth. This spread has narrowed slightly from 0.24 percentage points last week. The flat curve, in the context of growth acceleration, might reflect market concerns about sustainability or future economic headwinds.
## 4. Credit: Compressed
The credit market is experiencing compressed spreads, with a high-yield spread of 2.95%, a z-score of -1.00, and a percentile ranking of 6.54%. These figures indicate historically low spreads, reflecting a robust risk appetite among investors. Compared to last week, the compression has intensified, moving from a percentile of 15.69, suggesting increased confidence in credit markets. This compression fits with the macro environment of growth but could pose risks if economic conditions shift.
## 5. Conditional IF Scenarios (What tends to happen when this state persists)
– If this combination of growth acceleration and inflation reacceleration persists, it has historically often been followed by central banks maintaining or increasing tight monetary policies to prevent overheating.
– When financial conditions remain tight while growth accelerates, subsequent economic slowdowns have not been uncommon as the cost of borrowing rises.
– If credit spreads remain compressed in the bottom 10% of the past decade, history suggests that subsequent adjustments or corrections in risk pricing might occur.
## 6. Uncertainty and How to Verify Going Forward
This article is based solely on today’s JSON snapshot and expresses conditional tendencies, not forecasts. Current key metrics: GI regime (growth accelerating × inflation reaccelerating), financial conditions score (0.87), yield curve spread (0.20 pp), and high-yield spread (2.95%). These metrics can be monitored over the next few months to evaluate this scenario’s accuracy.
Readers must make their own investment decisions; this article does not constitute financial advice.
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