As of 2025-12-18, Today’s GI regime is Growth Acceleration × Inflation Reacceleration.
Financial conditions are tight, the yield curve is flat, and credit conditions show spread compression.
- The Growth Acceleration × Inflation Reacceleration regime has historically tended to indicate robust economic activity with rising price pressures.
- Financial conditions remain tight, with a slight movement towards less tightness compared to the past week.
- The yield curve is flat, with a marginal steepening observed since the last snapshot.
- Credit conditions show spread compression, with the high-yield spread in the lower 7th percentile, indicating relatively favorable credit conditions.
- The most notable shift is the slight loosening in financial conditions, as indicated by the lower score.
Growth × Inflation (GI)
The current regime of Growth Acceleration × Inflation Reacceleration suggests a period where economic growth is picking up pace alongside increasing inflationary pressures. The year-over-year growth in industrial production stands at 1.75%, with a three-month change indicating further acceleration. Inflation, as measured by the CPI, is at 3.03% year-over-year, with a slight increase over the past three months. This regime remains unchanged from the previous snapshot, indicating a consistent economic environment.
Financial Conditions (F)
Financial conditions are currently labeled as tight, which typically implies higher borrowing costs and more restrictive access to capital compared to more neutral or loose conditions. The federal funds rate is at 4.09%, and the two-year yield is at 3.46%. Compared to the past week, the financial conditions score has moved slightly towards less tightness, suggesting a marginal easing in the overall financial environment.
Yield Curve (R)
The yield curve is currently flat, with a spread of 0.30 percentage points between the 10-year and 3-month yields. This flatness often reflects uncertainty about future economic growth and inflation. Compared to the previous snapshot, the curve has steepened slightly, as indicated by the increase in the spread. This change could suggest a modest shift in market expectations regarding future economic conditions.
Credit (C)
Credit conditions are characterized by spread compression, with the high-yield spread at 2.95%. The z-score of -0.995 indicates that the spread is below the long-run average, and the percentile rank of approximately 7% places it in the lower range of the past decade. Compared to the previous snapshot, there has been further compression, suggesting improved credit conditions and potentially lower perceived risk in the high-yield market.
Uncertainty and How to Verify Going Forward
This report outlines conditional tendencies based on current data, not forecasts. Key metrics to track include the GI label and its core values, the financial-conditions score, the yield-curve spread, and the high-yield spread level and percentile. Monitoring these indicators over the coming months will help assess shifts in economic and financial conditions. Readers should note that this analysis does not constitute investment advice, and they should consider their own circumstances when making financial decisions.
コメント