Synthesises key growth-related indicators (capex, production, durables, housing, yield-curve and monetary signals) into a cohesive assessment of the current US economic expansion, slowdown or contraction.

US Growth and Business Cycle

Regime Assessment:

Expansionary / Risk-Positive
Regime Confidence Index: Medium Confidence
The regime is stable.

Why This Regime:

Strong expansionary momentum in capital expenditure (1) and yield curve steepening (2) act as primary drivers.
Dynamic weighting prioritizes these signals due to their High Aggregation Weights and High Interpretation Confidence (1)(2).
Durable Goods ex-Transportation (3) and Yield Curve Slope (4) were downweighted due to low confidence, internal conflicts, and data gaps.

Alignment & Tensions:

High-weight signals reinforce an expansionary outlook, with Capex Intent (1) and the Explicit Neutral Rate Proxy (5) both indicating supportive macro conditions.
Tensions exist where real-sector output in Industrial Production (6) and Housing (7) remain in Neutral states.
These tensions do not overturn the regime call because high-confidence cyclical leads (1)(2) suggest the expansionary impulse is currently dominant.

Scenario Balance:

Dominant scenario: Continued cyclical expansion supported by accelerating short-term investment momentum (1).
Primary upside risk: A breakthrough in the housing sector if mortgage rates decline below current constraints (7).
Primary downside risk: Persistent inflation forcing a policy reassessment that closes the accommodative stance gap (5).

What Would Change the Regime:

A decline in Capex Intent below the 0.75 threshold, signaling a loss of investment momentum (1).
The policy stance gap rising above -0.50, indicating the removal of material accommodation (5).
A yield spread contraction below the three-month trend, invalidating the current steepening regime (2).

Model Lineage

Visualisations below present upstream signal states and evidence context used to form the current silver market interpretation.

Durable Goods ex-Transportation Signal

Signal Summary:

Configuration statement: Given the absence of reported values for YoY_pct and 3M_pct, this setup aligns with Indeterminate price paths and Indeterminate volatility, where the dominant risk is Data uncertainty, not trend continuation.
The current state is unclassified due to a lack of observation data in the provided dataset (1).
Conviction Band: Low; Interpretation Confidence: Low Confidence; Internal Conflict Flag: Yes.

Methodology Applied:

A Bullish regime is triggered if YoY_pct exceeds +5% or 3M_pct exceeds +1% (1).
A Bearish regime is classified if YoY_pct falls below -3% or 3M_pct falls below -1% (1).
The signal utilizes Manufacturer’s New Orders (ADXTNO) to strip transportation volatility and capture core demand (1).
Durable Goods ex-Transportation Signal (1): latest observation date not provided.

Key Dynamics:

Main quantitative drivers: The interaction between YoY growth and 3-month momentum of core durable goods orders.
Current state: Indeterminate; the signal cannot verify if manufacturing demand is firming or softening without level data.
Internal tensions: Missing data prevents the calculation of the robust z-score (YoY_z) used for historical scaling.
Conditional Invalidation: A confirmed 3M_pct value below -1% would force an immediate Bearish classification.

Scenario Balance:

Base case dominant; risks balanced.
Upside risk: A return to core order growth >5% YoY, suggesting a re-acceleration in manufacturing.
Downside risk: A contraction in core orders below -3% YoY, flagging a cyclical slowdown.

Time Horizon & Aggregation:

Time Horizon: Cyclical (months) as core durable goods reflect intermediate business investment cycles.
Aggregation Weight Hint: Low, necessitated by current data gaps and the resulting low confidence score.

Macro Relevance:

Macro dimension: Measures capital expenditure momentum and core real-sector demand.
Cycle position: Mid-to-late cycle indicator, providing a lead on industrial activity.
Interaction: Typically converges with the Capex Intent Signal (2) and Industrial Production Signal (3).

Data & References:

FRED Series ADXTNO (Manufacturers' New Orders: Durable Goods Excluding Transportation): date not provided.
Data timeliness cannot be assessed; Data Freshness: Unknown.
Additional reliability would be gained from incorporating ISM Manufacturing New Orders data.

Durable Goods ex-Transportation Signal

Yield Curve Slope Signal

Signal Summary:

Configuration statement: Given a YC_Composite of 0.658 and a Z_T10Y3M of 0.912, this setup aligns with Range-biased price paths and Normal volatility, where the dominant risk is Regime shift, not Mean reversion.
The signal is currently in a Flat/Neutral regime, reflecting a stable policy environment or transition phase (1).
Conviction Band: Low; Interpretation Confidence: Low Confidence; Internal Conflict Flag: Yes. Signal Stability Assessment: Improving; Threshold Proximity: Near; Revision Sensitivity: Unknown.

Methodology Applied:

A YC_Composite between -0.75 and 0.75 defines a Flat/Neutral regime (1).
Divergence between T10Y2Y and T10Y3M metrics indicates lower signal confidence (1).
Yield Curve Slope Signal (latest observation: 2026-05-31).

Key Dynamics:

The primary driver is the rising Z_T10Y3M (0.912), which has crossed the steepening threshold, while Z_T10Y2Y (0.404) lags (1).
Internal Conflict: The spread between the 3-month and 2-year components creates directional tension (1).
Conditional Invalidation: The regime remains Flat/Neutral until the composite crosses 0.75 for two consecutive months (1).
The revision window cannot be assessed from provided content.

Scenario Balance:

Base case dominant: Persistence of the Flat/Neutral regime amid stable monetary policy.
Upside risk: Shift to a Steepening regime if long-end yields rise relative to the short-end.
Downside risk: Re-inversion if policy expectations tighten significantly.

Time Horizon & Aggregation:

Time Horizon: Cyclical (months). The signal identifies macro-financial regimes and recession risks (1).
Aggregation Weight Hint: Low, due to internal component divergence and low conviction.

Macro Relevance:

Informs the macro dimension of liquidity and growth prospects via the Treasury term structure (1).
The current direction implies a transition toward an expansionary outlook or rising term premiums (1).
Cycle position: Not determined.

Regime Context:

The current Flat/Neutral regime has been persistent since August 2024 (1).
Direction of change: Strengthening toward a Steepening regime.

Model Limitations:

Structural distortions from QE/QT and liquidity-driven noise at inflection points (1).

Data & References:

Latest Data: 2026-05-31. Most influential: YC_Composite (0.658) and Z_T10Y3M (0.912) (1).
Additional public datasets: Federal Reserve balance sheet (QE/QT) and credit spread indices.

Yield Curve Slope Signal

U.S. Treasury Yield Curve Signal

Signal Summary:

Configuration statement: Given a GS10 of 4.32%, a FEDFUNDS rate of 3.64%, and a Yield Spread of 0.68%, this setup aligns with Downward-biased price paths and Normal volatility, where the dominant risk is Regime shift, not Mean reversion.
The signal is currently in a Bearish regime, characterized by a steepening curve where the spread exceeds its three-month trend (1).
Conviction Band: Medium; Interpretation Confidence: High Confidence; Internal Conflict Flag: No. Signal Stability Assessment: Improving; Threshold Proximity: Near; Revision Sensitivity: Moderate.

Methodology Applied:

A Bearish regime is triggered when the Yield Spread is > 1.5% or when the Spread is greater than its 3-month Trend (1).
A Bullish regime (recession risk) is defined by a Yield Spread <= 0% (1).
Neutral regimes occur when the spread is between 0% and 0.5%, or between 0.5% and 1.5% while remaining below the trend (1).
U.S. Treasury Yield Curve Signal: Latest observation April 01, 2026 (1).

Key Dynamics:

The primary driver is the Yield Spread (0.68) rising above the Yield Spread Trend (0.59), confirming steepening momentum (1).
Momentum has shifted from a Neutral state in February 2026 to a strengthening Bearish configuration over the last two months (1).
Conditional Invalidation: A decline in the 10-year yield or a hold in the Fed Funds rate that pushes the Spread below the 3-month Trend (currently 0.59) (1).
Signal stability is currently improving as the spread widens relative to the moving average trend (1).

Scenario Balance:

Base Case dominant: Continued curve steepening supporting risk-on cyclical exposure.
Upside risk: Rapid curve normalization (steepening > 1.5%) triggered by aggressive policy easing.
Downside risk: Re-inversion triggered by a hawkish policy pivot or collapse in long-term growth expectations.

Time Horizon & Aggregation:

Time Horizon: Cyclical (months) based on the lead-lag structure of yield curve dynamics (1).
Aggregation Weight Hint: High; the yield curve is a primary benchmark for macro regime identification (1).

Macro Relevance:

The signal informs growth expectations and term premia dimensions (1).
Economic mechanism: Curve steepening implies a transition to early-cycle expansion or rising compensation for long-term interest rate risk (1).
Cycle position: Not determined.
Typically interacts with real yield levels and liquidity signals to confirm the sustainability of expansion (1).

Regime Context:

The current Bearish regime is newly re-entered as of March 2026 after a brief Neutral interlude (1).
Direction of change: Strengthening Bearish bias as the spread-to-trend gap widens (1).

Model Limitations:

Lagging indicator (6-18 months) that may conflate policy shifts with term premia changes (1).
Sensitive to data revisions and holiday-related volatility in Treasury markets (1).

Data & References:

Latest Data: April 2026 Spread of 0.68 vs. Trend of 0.59 (1).
Most influential: 10-year Treasury Rate (Value_GS10) and Effective Federal Funds Rate (1).
Additional datasets: Real yield levels and term premium estimates (ACM/Kim-Wright) would improve reliability (1).

U.S. Treasury Yield Curve Signal

Industrial Production Signal

Signal Summary:

Configuration statement: Given an INDPRO YoY of 1.35% and a positive 3-month momentum trend, this setup aligns with Range-biased price paths and Normal volatility, where the dominant risk is Mean reversion, not Regime shift. (1)
The signal is currently in a Neutral regime, characterized by positive but moderate growth that fails to trigger expansionary thresholds. (1)
Conviction Band: Medium; Interpretation Confidence: High Confidence; Internal Conflict Flag: No. Signal Stability Assessment: Stable; Threshold Proximity: Moderate; Revision Sensitivity: Moderate.

Methodology Applied:

A Bullish/Risk-on bias requires INDPRO YoY > 2% and positive 3m momentum; currently, growth is below this threshold. (1)
Neutral regimes are triggered by mixed growth and momentum signals, indicating a state of flux or transition. (1)
Industrial Production (INDPRO) and Mining share (RIWG21222S) datasets used; latest observation 2026-04-01. (1)

Key Dynamics:

The primary driver is the INDPRO YoY rate of 1.35%, which sits between the contractionary (<0%) and expansionary (>2%) boundaries. (1)
Positive momentum is evident as INDPRO rose from 101.47 in January to 102.49 in April. (1)
Conditional Invalidation: A move in INDPRO YoY above 2% or below 0% would force a regime exit. (1)
The signal has shown high persistence, maintaining a Neutral status for twelve consecutive months. (1)

Scenario Balance:

Base case dominant: Continued mid-range industrial growth supporting range-bound macro pricing.
Upside risk: Acceleration of manufacturing output (INDPRO > 2%) triggering a pro-cyclical risk-on shift.
Downside risk: Contraction in durable goods demand pushing YoY growth into negative territory.

Time Horizon & Aggregation:

Time Horizon: Cyclical (months), reflecting the medium-term nature of real-sector output trends.
Aggregation Weight Hint: Medium, as the signal identifies the industrial phase but currently lacks directional extremity.

Macro Relevance:

Informs the real-sector demand impulse and pro-cyclical risk appetite. (1)
Transmission Mechanism: Stable output levels suggest balanced industrial demand without immediate margin pressure or liquidity constraints. (1)
Cycle position: Not determined.

Regime Context:

The current Neutral regime is persistent, showing no transition since May 2025. (1)
Direction of change: Stabilising at current growth levels.

Model Limitations:

INDPRO is subject to significant annual benchmark revisions that may alter the historical regime context. (1)
Mining share data is slow-moving and serves only as a structural modifier. (1)

Data & References:

Industrial Production (Value_INDPRO), latest 2026-04-01: 102.49. (1)
Mining Share (Value_RIWG21222S), latest 2026-04-01: 0.3464. (1)
Public datasets: ISM New Orders Index and Capital Goods Orders for triangulation.

Industrial Production Signal

Housing Lead Signal

Signal Summary:

Configuration statement (mandatory): Given a composite score of 0.597 and positive standardized permits (0.70), this setup aligns with Range-biased price paths and Normal volatility, where the dominant risk is Trend continuation, not Regime shift.
The signal currently occupies a Neutral regime, having recovered toward the expansion threshold after a sharp March deceleration (1).
Conviction Band: Medium; Interpretation Confidence: High Confidence; Internal Conflict Flag: No. Signal Stability Assessment: Volatile; Threshold Proximity: Near; Revision Sensitivity: High.

Methodology Applied:

Composite scores exceeding 0.75 indicate housing sector expansion and risk-on sentiment (1).
Rapid deterioration is flagged when the 3-month change in composite values falls below -0.60 (1).
Building Permits (PERMIT) serve as the primary lead metric, while Mortgage Rates (MORTGAGE30US) act as the dominant constraint (1).
Building Permits and Housing Starts data used through 2026-04-30; Mortgage Rates through 2026-05-31.

Key Dynamics:

The primary driver is the stabilization of Building Permits (Z-score 0.70) and Housing Starts (Z-score 0.72) following a volatile first quarter (1).
Mortgage rates remain a headwind (Z-score 0.07), preventing a sustained breakthrough into the Expanding regime.
Conditional Invalidation: A composite score drop below -0.75 would trigger a transition to a Contracting regime.
Signal stability is low, characterized by frequent shifts between Neutral and Expanding states since late 2025.

Scenario Balance:

Base case dominant: Continued Neutral regime as permits and rates reach a temporary equilibrium.
Upside risk: Breakthrough to Expanding regime if mortgage rates decline below 6.0%.
Downside risk: Shift to Contracting regime triggered by a "Rapid deterioration" print (1).

Time Horizon & Aggregation:

Time Horizon: Cyclical (months), reflecting the lead time of residential construction authorizations (1).
Aggregation Weight Hint: Medium, due to high revision sensitivity and seasonal noise in groundbreakings.

Macro Relevance:

Informs the cyclical growth dimension, specifically the health of the residential construction pipeline.
Economic mechanism: Pipeline health adjusted for financing affordability influences broader demand impulses (1).
Cycle position: Not determined.
Typically interacts with consumer confidence and credit availability signals to confirm growth trends (1).

Regime Context:

The signal is in a persistent Neutral state (duration: 2 months) following a brief February spike.
Direction of change: Stabilizing near the upper bound of the Neutral range.

Model Limitations:

Frequent data revisions typically cause a 1-3 month lag for signal stability (1).
Weather-related noise often distorts Housing Starts during seasonal turning points.

Data & References:

Latest core metrics (PERMIT, HOUST) dated 2026-04-30 (1).
The 30-Year Fixed Mortgage Rate (6.51% as of 2026-05-31) is the most influential current constraint.
Additional datasets: Regional builder sentiment indices and mortgage application volumes.

Housing Lead Signal

Capex Intent Signal

Signal Summary:

Configuration statement: Given a Capex_Intent of 1.12 and ADXTNO Z-scores exceeding 1.5, this setup aligns with Upward-biased price paths and Normal volatility, where the dominant risk is Trend continuation, not Mean reversion.
The signal remains in a persistent Expansion regime with strong business investment momentum (1).
Conviction Band: High; Interpretation Confidence: High Confidence; Internal Conflict Flag: No.
Signal Stability Assessment: Stable; Threshold Proximity: Far; Revision Sensitivity: High.

Methodology Applied:

Capex_Intent values above 0.75 define an Expansion phase with strong durable orders momentum (1).
Ex-Transport (ADXTNO) data is prioritized to isolate core industrial demand from aircraft distortions (1).
Alignment between 3-month annualized and YoY growth validates the current regime strength (1).
Manufacturers' New Orders (DGORDER) and Ex-Transport (ADXTNO) datasets used; latest observation: 2026-03-31 (1).

Key Dynamics:

The primary driver is the robust Ex-Transport momentum, with a Z-score of 1.51 (1).
ADXTNO 3-month annualized growth (10.46%) exceeds YoY growth (7.63%), indicating accelerating short-term momentum (1).
There are no significant internal offsets as both headline and ex-transport metrics are positive (1).
Conditional Invalidation: A Capex_Intent print below 0.75 would trigger a shift to Neutral (1).
The signal has shown multi-month directional alignment, supporting high regime persistence (1).

Scenario Balance:

Base Case dominant: Continued expansion supported by rising equipment and structures spending pipeline (1).
Upside risk: Acceleration in headline orders if defense or aircraft bookings surge (1).
Downside risk: Nominal price effects masking volume declines in core industrial goods (1).

Time Horizon & Aggregation:

Time Horizon: Cyclical (months); the signal serves as a multi-month lead for business investment (1).
Aggregation Weight Hint: High; strong regime conviction and internal metric alignment justify high weighting (1).

Macro Relevance:

Informs the business investment and capital expenditure dimension of macro demand (1).
Economic mechanism: Rising intensity of business demand for long-lasting equipment and industrial goods (1).
Cycle position: Not determined.
Typically interacts with Industrial Production and PMI New Orders for broad cyclical confirmation (1).

Regime Context:

This is a persistent regime, remaining in Expansion since November 2025 (1).
Direction of change: Stabilising at high levels following a peak in February 2026 (1).

Model Limitations:

Subject to high monthly volatility and significant data revisions (1).
Nominal price inflation may mask real volume dynamics within the order data (1).

Data & References:

Latest observation date: 2026-03-31 (1).
The Ex-Transport Z-scores (Z_EX_YoY and Z_EX_3mAnn) are currently the most influential data points (1).
Public datasets: Industrial Production and ISM Manufacturing PMI would provide additional depth (1).

Capex Intent Signal

Explicit Neutral Rate (r*) Proxy Signal

Signal Summary:

Configuration statement: Given a stance_gap of -0.94, a rising rstar_proxy, and a positive neutral_drift, this setup aligns with Upward-biased price paths and Indeterminate volatility, where the dominant risk is Regime shift, not Mean reversion. (1)
The signal is in a materially accommodative state, characterized by an expansionary regime bias as the real policy rate remains significantly below the market-implied neutral rate. (1)
Conviction Band: Medium; Interpretation Confidence: Low Confidence; Internal Conflict Flag: No. Signal Stability Assessment: Improving; Threshold Proximity: Far; Revision Sensitivity: Unknown.

Methodology Applied:

A stance_gap ≤ -0.50 indicates policy is materially accommodative and supportive of risk assets. (1)
Neutral_drift > +0.10 signifies a rising market-implied neutral rate, which reduces effective restrictiveness. (1)
Negative stance gaps imply an accommodative/expansionary regime bias. (1)
Explicit Neutral Rate (r*) Proxy Signal (latest observation: 2026-05-22). (1)

Key Dynamics:

The primary driver is the stance_gap (-0.94), which reinforces the materially accommodative classification. (1)
The rising neutral_drift (+0.10 threshold) indicates the market is pricing a higher long-run neutral rate, deepening the accommodative impulse. (1)
Conditional Invalidation: The stance_gap rising above -0.50, signaling a shift toward a neutral policy stance. (1)
The signal shows high persistence, with the stance_gap remaining accommodative throughout the provided history. (1)

Scenario Balance:

Base case dominant: Accommodative policy supports growth and risk asset expansion. (1)
Upside risk: Sustained rising neutral drift supports a "higher-for-longer" economic resilience narrative. (1)
Downside risk: Materially accommodative conditions lead to persistent inflation, forcing a sharp policy reassessment. (1)

Time Horizon & Aggregation:

Time Horizon: Cyclical (months), reflecting the lead-lag structure of policy rates relative to long-term neutral proxies. (1)
Aggregation Weight Hint: Medium, as the stance_gap is significantly beyond the accommodative threshold. (1)

Macro Relevance:

The signal informs the liquidity and pricing dimensions by measuring policy restrictiveness. (1)
The implied economic mechanism is a demand impulse via low real borrowing costs relative to neutral. (1)
Cycle position: Not determined.

Regime Context:

Persistent accommodative regime; the rising neutral drift indicates a strengthening of the expansionary bias. (1)
Direction of change: Strengthening accommodativeness as r* rises while policy remains lagged. (1)

Model Limitations:

Market-implied real yields contain liquidity and risk premia that may distort the pure r* signal. (1)
A 10-year horizon for neutral rates may mismatch near-term policy adjustments. (1)

Data & References:

Explicit Neutral Rate (r*) Proxy Signal (2026-05-22). (1)
Most influential: stance_gap (-0.94) and neutral_drift (Rising). (1)
Public datasets: 10-Year Treasury Real Yields and Federal Funds Effective Rate.

Explicit Neutral Rate (r*) Proxy Signal