Weekly Economic Regime Report As of: 2026-06-15 1/11 Economic Strategist Summary Economic Regime: Disinflationary Expansion Confidence: High (100% input availability) Growth remains constructive while inflation pressure is easing, a favorable macro mix. 2/11 What Changed Since Prior Economic Run - Growth score improved by 1.0 pts versus the prior run. - Labor score was broadly stable versus the prior run. - Inflation Pressure increased by 1.8 pts versus the prior run (more inflation pressure). - Credit score improved by 3.2 pts versus the prior run. - Liquidity score deteriorated by 1.7 pts versus the prior run. Historical context: Growth was little changed (+1.0 pts). Labor was little changed (+0.0 pts). Inflation Pressure increased (+1.8 pts, more inflation pressure). Credit improved (+3.2 pts). Liquidity weakened (-1.7 pts). 3/11 Economic Regime Dashboard Growth: 86/100 - Reaccelerating Labor: 73/100 - Tight Inflation Pressure: 50/100 - Benign / Watch Credit: 90/100 - Loose Liquidity: 65/100 - Neutral 3B/11 Economic Transition Monitor - Current economic regime: Disinflationary Expansion. - Prior economic regime: Disinflationary Expansion. - Regime duration: 3 weekly observation(s). - Regime changed this run: No. - Transition pressure: insufficient history for 4-week confirmation. 3C/11 Economic Momentum + Deterioration Monitor Economic momentum: - Insufficient history for 4-week economic momentum analysis. Deterioration monitor: - Insufficient history for persistent 3-run deterioration or improvement signals. 3D/11 Market / Economy Divergence Monitor - Market regime: Broad Risk-On. - Economic regime: Disinflationary Expansion. - Current alignment read: Market Regime: Broad Risk-On. Economic Regime: Disinflationary Expansion. Market structure and macro conditions are broadly aligned. - Market / economy divergence risk: Low. - Reason: market and economic regimes are not showing a major contradiction based on current pillar scores. 3E/11 Economic Data Freshness Monitor - Overall data freshness: Moderate lag (65/100). - Monthly official macro data often lag by one to two months; weekly claims, credit spreads, financial conditions, and Fed balance-sheet data provide the faster confirmation layer. - Lagged official-data inputs: Manufacturing Industrial Production YoY, Manufacturers New Orders YoY, Retail Sales YoY, Retail Sales 3M Annualized, Industrial Production YoY, Nonfarm Payrolls 3M Avg Change, Unemployment Rate, Unemployment Rate 3M Change, ... - Current/faster confirmation inputs: High Yield OAS, High Yield OAS 13W Change, Investment Grade OAS, Investment Grade OAS 13W Change, Fed Balance Sheet 13W Change, Treasury General Account 13W Change. - Interpretation note: emphasize this as the latest official macro regime read, not a real-time nowcast. Pillar freshness: - Growth: Stale / caution (avg age 63d; freshest Manufacturing Industrial Production YoY as of 2026-05-01; oldest Manufacturers New Orders YoY as of 2026-04-01). - Labor: Lagged (avg age 38d; freshest Initial Claims 4W Avg as of 2026-05-23; oldest Nonfarm Payrolls 3M Avg Change as of 2026-05-01). - Inflation Pressure: Lagged (avg age 45d; freshest CPI YoY as of 2026-05-01; oldest CPI YoY as of 2026-05-01). - Credit: Current (avg age 11d; freshest High Yield OAS as of 2026-06-11; oldest Chicago Fed NFCI as of 2026-05-22). - Liquidity: Recent (avg age 29d; freshest Fed Balance Sheet 13W Change as of 2026-06-10; oldest M2 Money Supply YoY as of 2026-04-01). 3F/11 Economic Signal Defensibility - This is the latest official macro-regime read, not a real-time nowcast. - Slow official data should be read alongside faster confirmation from claims, credit spreads, financial conditions, and Fed balance-sheet data. - Raw vs freshness-adjusted pillar scores: - Growth: raw 86/100 | freshness-adjusted 77/100 | freshness: Stale / caution - Labor: raw 73/100 | freshness-adjusted 69/100 | freshness: Lagged - Inflation Pressure: raw 50/100 | freshness-adjusted 50/100 | freshness: Lagged - Credit: raw 90/100 | freshness-adjusted 90/100 | freshness: Current - Liquidity: raw 65/100 | freshness-adjusted 64/100 | freshness: Recent - Interpretation caveats: - Growth and labor are economically important but can lag turning points. - Credit is the faster financial-conditions confirmation layer, not a direct measure of real economic output. - Inflation Pressure is directional: higher means more inflation pressure, not a better inflation backdrop. - Liquidity is a plumbing/policy mix and should be interpreted with sign logic, not as a simple risk-on/risk-off score. 3G/11 Official Macro vs Faster Confirmation - Slow official macro: Growth 86/100, Labor 73/100, Inflation Pressure 50/100. - Faster financial confirmation: Credit 90/100, Liquidity 65/100. - Credit conditions are currently supportive and not signaling broad stress. 3H/11 Liquidity Interpretation Notes - Fed balance sheet growth is generally liquidity-supportive; contraction is generally less supportive. - M2 growth is a broad money/liquidity proxy, but it is lagged and regime-dependent. - Reverse Repo changes are money-market plumbing; falling RRP can release liquidity, while rising RRP can absorb cash. - Treasury General Account changes affect reserve liquidity; falling TGA can add liquidity, while rising TGA can drain it. - Fed funds is better read as policy restrictiveness than pure liquidity. 4/11 Growth / Labor / Inflation / Credit / Liquidity Pillars Growth: 86/100 - Reaccelerating Growth momentum is improving across cyclical inputs. - Manufacturing Industrial Production YoY: 1.43% | component score 63 - Manufacturers New Orders YoY: 11.66% | component score 100 - Retail Sales YoY: 4.87% | component score 98 - Retail Sales 3M Annualized: 12.88% | component score 100 - Industrial Production YoY: 1.67% | component score 67 Labor: 73/100 - Tight Labor remains supportive, though it may also limit policy easing. - Nonfarm Payrolls 3M Avg Change: 188k | component score 79 - Unemployment Rate: 4.30% | component score 73 - Unemployment Rate 3M Change: -0.10 ppt | component score 83 - Initial Claims 4W Avg: 209,000 | component score 76 - Initial Claims 13W Change: 1.90% | component score 52 Inflation Pressure: 50/100 - Benign / Watch Inflation pressure is moderate but should be watched for direction of travel. - CPI YoY: 4.27% | component score 57 - Core CPI YoY: 2.96% | component score 27 - PPI YoY: 6.42% | component score 100 - Average Hourly Earnings YoY: 3.45% | component score 15 Credit: 90/100 - Loose Credit conditions are supportive and not signaling broad stress. - High Yield OAS: 2.78% | component score 100 - High Yield OAS 13W Change: -0.50 ppt | component score 100 - Investment Grade OAS: 0.75% | component score 100 - Investment Grade OAS 13W Change: -0.18 ppt | component score 91 - Chicago Fed NFCI: -0.51 | component score 93 - NFCI 13W Change: 0.02 | component score 57 Liquidity: 65/100 - Neutral Liquidity is not clearly supportive or restrictive. - Fed Balance Sheet 13W Change: 1.19% | component score 77 - M2 Money Supply YoY: 4.72% | component score 86 - Reverse Repo 13W Change: 1.0 | component score 50 - Treasury General Account 13W Change: -10,064.0 | component score 52 - Effective Fed Funds Rate: 3.63% | component score 59 5/11 Market Regime vs Economic Regime Alignment Market Regime: Broad Risk-On. Economic Regime: Disinflationary Expansion. Market structure and macro conditions are broadly aligned. 6/11 Historical Economic Context History file: /app/data/history/economic_regime_history.csv Current history observations: 3 Growth was little changed (+1.0 pts). Labor was little changed (+0.0 pts). Inflation Pressure increased (+1.8 pts, more inflation pressure). Credit improved (+3.2 pts). Liquidity weakened (-1.7 pts). 7/11 Advisor-Facing Read-Through Advisor conversation: the economy appears constructive based on the latest official data, but inflation and market confirmation should be monitored. Frame this as macro-regime context rather than a portfolio recommendation. Key Economic Inputs - Manufacturing Industrial Production YoY: 1.43% as of 2026-05-01 - Manufacturers New Orders YoY: 11.66% as of 2026-04-01 - Retail Sales YoY: 4.87% as of 2026-04-01 - Industrial Production YoY: 1.67% as of 2026-05-01 - Nonfarm Payrolls 3M Avg Change: 188k as of 2026-05-01 - Unemployment Rate: 4.30% as of 2026-05-01 - Initial Claims 4W Avg: 209,000 as of 2026-05-23 - CPI YoY: 4.27% as of 2026-05-01 - Core CPI YoY: 2.96% as of 2026-05-01 - High Yield OAS: 2.78% as of 2026-06-11 - Investment Grade OAS: 0.75% as of 2026-06-11 - Chicago Fed NFCI: -0.51 as of 2026-05-22 - Fed Balance Sheet 13W Change: 1.19% as of 2026-06-10 - M2 Money Supply YoY: 4.72% as of 2026-04-01 - Effective Fed Funds Rate: 3.63% as of 2026-05-01 Charts - /app/data/charts/economic_regime_pillars.png - /app/data/charts/economic_regime_history.png 8/11 OpenRouter Economic Strategist Read-Through #### 1. Executive Read-Through - The current economic regime is characterized as a Disinflationary Expansion, indicating moderate growth with easing inflation pressures. - Growth metrics show a robust score of 85.6, suggesting strong economic activity. - Labor indicators are stable, with a score of 72.8, reflecting a healthy job market despite some lag in data. - Inflation Pressure remains moderate with a score of 49.7, indicating that inflationary pressures are easing but still present. - Credit conditions are favorable, with a high score of 90.1, signaling strong credit availability. - Liquidity conditions are slightly tightening, with a score of 64.8, warranting monitoring for potential impacts on market dynamics. #### 2. Economic Regime Interpretation The Disinflationary Expansion regime suggests a backdrop of solid growth coupled with a gradual easing of inflation pressures. This environment typically supports consumer spending and business investment, although the current inflation metrics indicate that pressures remain, albeit at a moderated level. The high confidence in this regime reflects a stable economic outlook, but advisors should remain vigilant for any shifts in inflation or labor dynamics. #### 3. Pillar Assessment - **Growth**: The growth score of 85.6 indicates strong economic performance, underpinned by robust retail sales and industrial production metrics. - **Labor**: With a labor score of 72.8, the job market remains resilient. However, the continuing claims figure of 1,772,750 suggests some caution as it may indicate latent unemployment. - **Inflation Pressure**: The inflation pressure score of 49.7 suggests a balance; while inflation is easing, it is essential to monitor for any signs of resurgence. - **Credit**: A credit score of 90.1 reflects favorable conditions, with low high-yield and investment-grade spreads indicating strong investor sentiment and credit availability. - **Liquidity**: The liquidity score of 64.8 indicates tightening conditions, which may impact market dynamics if the trend continues. Monitoring liquidity measures will be crucial. #### 4. Market Regime Alignment The current market regime is classified as Broad Risk-On, which aligns with the economic backdrop of Disinflationary Expansion. The strong growth and favorable credit conditions support this risk-on sentiment, suggesting that market participants are comfortable taking on more risk. However, the slight tightening in liquidity may complicate this alignment, warranting close observation. #### 5. Macro and Advisor Conversation Themes - Discuss the implications of the Disinflationary Expansion regime and its potential effects on consumer behavior and business investment. - Explore how the high credit score may influence lending practices and corporate financing. - Highlight the importance of monitoring inflation pressures and labor market dynamics as indicators of economic health. - Consider the implications of tightening liquidity on market conditions and investor sentiment. - Frame conversations around the potential for shifts in the economic regime and what that might mean for market behavior. #### 6. Risks and Caveats - Economic data is often lagged and subject to revisions, which can alter the interpretation of current conditions. - Inflation risks remain, particularly if demand pressures resurface unexpectedly. - Credit risk should be monitored closely, especially as spreads can change rapidly in response to market sentiment. - Labor data can lag turning points, making it essential to contextualize recent claims data within broader trends. - The interpretation of liquidity conditions has limits, and shifts could occur without warning, impacting market dynamics. #### 7. Advisor Conversation Starters - How do you view the current balance between growth and inflation pressures in your discussions with clients? - What indicators do you find most useful for assessing the health of the labor market? - How do you interpret the current credit conditions in relation to corporate financing strategies? - What are your thoughts on the potential impact of tightening liquidity on market sentiment? - How do you plan to address potential shifts in the economic regime with your clients?