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:

Regime: Expansionary / Risk-Positive
Regime Confidence Index: High Confidence
Regime Stability: Stable

Why This Regime:

The assessment is anchored by high-weight cyclical indicators showing robust expansionary momentum. Both the Housing Lead (1) and Capex Intent (2) signals carry maximum weight and report high conviction in expansionary states.
Dynamic weighting prioritizes these forward-looking signals over lagging real-sector output. The neutral policy stance gap (3) further supports an expansionary bias.
The Durable Goods ex-Transportation signal (4) was downweighted due to low interpretation confidence and missing observation data.

Alignment & Tensions:

Strong alignment exists between residential construction activity (1) and business investment intentions (2), which both show rising momentum.
Tensions are present in the Industrial Production signal (5), which remains in a Neutral regime as output lags the acceleration in forward orders.
These tensions do not overturn the regime call because the Yield Curve Slope (6) and US Treasury Yield Curve (7) are both transitioning out of restrictive phases toward expansionary normalization.

Scenario Balance:

Dominant Scenario: Sustained cyclical expansion driven by a robust core investment pipeline and construction starts.
Primary Upside Risk: A breakout in industrial output volume (5) that aligns real-sector data with leading indicators.
Primary Downside Risk: Monetary policy tightening that closes the accommodative stance gap (3) and slows housing momentum.

What Would Change the Regime:

A reversal in Capex Intent where the composite Z-score falls below the 0.75 expansion threshold (2).
A rapid deterioration in the housing lead composite change exceeding -0.60 (1).
A return to negative yield spreads signaling renewed restrictive conditions (7).

Inputs

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 (mandatory): Given the T10Y2Y spread at 0.51 and T10Y3M at 0.65, this setup aligns with Range-biased price paths and Normal volatility, where the dominant risk is a Regime shift toward expansion, not mean reversion. (1)
The signal is currently in a Flat/Neutral regime, reflecting a transition away from restrictive policy towards economic normalization. (1)
Conviction Band: Low; Interpretation Confidence: High Confidence; Internal Conflict Flag: No. Signal Stability Assessment: Improving; Threshold Proximity: Near; Revision Sensitivity: Moderate.

Methodology Applied:

A Composite Z-score between -0.50 and 0.50 defines a Flat or Neutral curve, implying mid-cycle stability. (1)
Persistent readings above 0.75 indicate a Steepening curve, signaling expansionary bias and economic acceleration. (1)
Readings below -0.75 indicate an Inverted curve, signaling restrictive policy relative to growth. (1)
Yield Curve Slope Signal: Latest observation 2026-03-31. (1)

Key Dynamics:

The primary driver is the rising Z-score of the T10Y3M spread (0.69), which is approaching expansionary territory. (1)
Momentum is currently stabilizing in positive territory after a long period of inversion throughout 2023. (1)
Conditional Invalidation: The composite Z-score falls below -0.75 for two consecutive months. (1)
Signal stability is high, with the 10Y2Y and 10Y3M components showing directional alignment. (1)

Scenario Balance:

Base case dominant; risks balanced.
Most plausible upside risk: Acceleration into an expansionary regime if the composite breaches 0.75.
Most plausible downside risk: Re-inversion if short-term rates rise faster than growth expectations.

Time Horizon & Aggregation:

Time Horizon: Cyclical (months) due to the multi-quarter lag between curve shifts and economic impact. (1)
Aggregation Weight Hint: Medium; the signal is a primary macro lead but currently lacks a directional breakout.

Macro Relevance:

This signal informs the macro dimension of growth expectations and policy restrictiveness. (1)
The economic mechanism is the transmission of Federal Reserve policy rates into long-term funding costs and term premiums. (1)
Cycle position: Mid-cycle transition (not determined for specific phase).
Interacts typically with credit spreads and volatility to confirm financial stress levels. (1)

Regime Context:

The current Flat/Neutral regime has persisted since August 2024 (approx. 20 months). (1)
Direction of change: Strengthening towards an expansionary (Steepening) regime. (1)

Model Limitations:

Lagging indicator properties (2-6 quarters) and potential distortion by QE/QT. (1)
Subject to constant-maturity yield revisions. (1)

Data & References:

Yield Curve Slope Signal (2026-03-31). (1)
Dominant datapoints: T10Y2Y (0.51) and T10Y3M (0.65). (1)
Credit Spreads and VIX data would improve reliability of the regime transition.

Yield Curve Slope Signal

U.S. Treasury Yield Curve Signal

Signal Summary:

Configuration statement (mandatory): Given a Yield_Spread of 0.49 and a GS10 rate of 4.13, this setup aligns with Range-biased price paths and Normal volatility, where the dominant risk is Mean reversion, not Trend continuation.
The signal has transitioned from a three-month Bearish steepening phase into a Neutral regime as the spread stabilised below its three-month trend (1).
Conviction Band: Medium, Interpretation Confidence: High Confidence, and Internal Conflict Flag: No. Signal Stability Assessment: Improving, Threshold Proximity: Near, and Revision Sensitivity: Moderate (1).

Methodology Applied:

Yield Spread <= 0%: Economic curve inversion indicating restrictive monetary policy relative to growth expectations (1).
0% < Yield Spread <= 0.5%: Classification of a benign macro environment and stable term structure (1).
Yield Spread > 3-month Trend: Identification of aggressive steepening associated with regime shifts (1).
U.S. Treasury Yield Curve Signal dataset, latest observation: 2026-02-01 (1).

Key Dynamics:

The primary driver is a Yield_Spread of 0.49, which falls within the 0% to 0.5% Neutral threshold (1).
Momentum has slowed as the spread (0.49) converged with the 3-month trend (0.493), halting the recent steepening impulse (1).
Conditional Invalidation: A move in the Yield_Spread below 0%, signalling renewed curve inversion and restrictive conditions (1).
The signal shows improving stability after exiting a volatile steepening phase observed in late 2025 (1).

Scenario Balance:

Base case dominant: Continued benign macro environment supported by a stable, non-inverted term structure (1).
Upside risk: Bull-steepening expansion triggered by the spread exceeding the 3-month trend and 1.5% threshold (1).
Downside risk: Transition to recessionary risk-off triggered by a return to negative yield spreads (1).

Time Horizon & Aggregation:

Cyclical (months): Methodology defines this signal as a macro overlay with a 6–18 month lead time (1).
Aggregation Weight Hint: Medium; the signal provides a high-level regime anchor but is not a tactical trigger (1).

Macro Relevance:

Informs the pricing of duration risk and the balance between growth expectations and policy tightness (1).
Economic mechanism: Measures the spread between long-term expectations and current monetary policy restrictiveness (1).
Cycle position: Not determined.
Typically interacts with real yields and credit spreads to validate systemic funding conditions (1).

Regime Context:

The current Neutral regime is newly entered as of Feb 2026, following a persistent Bearish phase (1).
Direction of change: Stabilising, as the spread recentres around its medium-term trend (1).

Model Limitations:

Signal exhibits lagging behaviour (6–18 months) and conflates policy expectations with term premia (1).

Data & References:

Latest observation: 2026-02-01. Influential datapoints: GS10 (4.13) and FEDFUNDS (3.64) (1).
Public datasets like the VIX or High Yield Credit Spreads would improve interpretation of systemic stress levels.

U.S. Treasury Yield Curve Signal

Industrial Production Signal

Signal Summary:

Configuration statement (mandatory): Given a latest INDPRO YoY value of 1.44% and positive three-month momentum, this setup aligns with Range-biased price paths and Normal volatility, where the dominant risk is Mean reversion, not Trend continuation. (1)
The signal remains in a persistent Neutral regime, characterized by positive but modest real-sector output growth. (1)
Conviction Band: Medium; Interpretation Confidence: High Confidence; Internal Conflict Flag: No. Signal Stability Assessment: Stable; Threshold Proximity: Moderate; Revision Sensitivity: High.

Methodology Applied:

INDPRO YoY must exceed 2.0% alongside positive three-month momentum to trigger an expansionary/bullish classification. (1)
The methodology defines the Neutral regime as INDPRO YoY > 0% but lacking the strength or confirmation for full expansion. (1)
Mining sector value-added share (RIWG21222S) acts as a confidence modifier for the industrial cycle's strength. (1)
Latest observation date: 2026-02-01.

Key Dynamics:

The primary driver is the INDPRO YoY rate of 1.44%, which is currently insufficient to breach the +2.0% expansion threshold. (1)
Positive momentum is observed over the last three months (101.68 to 102.55), indicating stabilization rather than acceleration. (1)
Mining share growth (12.6%) provides a buffer but does not override the primary production volume metric. (1)
Conditional Invalidation: A move in INDPRO YoY above 2.0% with confirming durable goods data. (1)
Signal stability is high, as the "Neutral" label has persisted for twelve consecutive months. (1)

Scenario Balance:

Base case dominant: Continued range-bound industrial activity supporting modest cyclical demand.
Most plausible upside risk: Acceleration in capital goods demand pushing YoY growth above 3.0%.
Most plausible downside risk: Hard data contraction (YoY < 0%) driven by weakening forward orders.

Time Horizon & Aggregation:

Time Horizon: Cyclical (months) as industrial cycles typically reflect multi-month demand trends.
Aggregation Weight Hint: Medium; industrial data is a critical real-economy anchor but subject to revisions.

Macro Relevance:

Informs the real-sector demand dimension, specifically for metals and cyclical manufacturing inputs.
Economic mechanism: Real-sector industrial volume growth drives physical commodity demand-supply dynamics.
Cycle position: Not determined.
Typically interacts with ISM New Orders and Durable Goods to confirm whether production matches demand intensity. (1)

Regime Context:

This is a persistent regime, having maintained a "Neutral" status since at least March 2025. (1)
Direction of change: Stabilising; growth is holding above zero but lacks a clear breakout trajectory.

Model Limitations:

Significant annual benchmark revisions can materially alter the interpreted trend. (1)
Mining share is a slow-moving quarterly variable that may lag rapid manufacturing shifts. (1)

Data & References:

Industrial Production Index (INDPRO), 2026-02-01: 102.55. (1)
Mining Value-Added Share YoY, 2026-02-01: 12.61%. (1)
Revision window cannot be assessed from provided content.
ISM New Orders and Capital Goods Orders would improve the confirmation of trend exhaustion or expansion.

Industrial Production Signal

Housing Lead Signal

Signal Summary:

Configuration statement: Given a Housing_Lead composite of 1.206, a Z_HOUST of 2.62, and a Z_PERMIT of 0.53, this setup aligns with Upward-biased price paths and Normal volatility, where the dominant risk is Trend continuation, not mean reversion. (1)
The signal has transitioned into an Expanding regime, indicating a significant acceleration in residential economic activity. (1)
Conviction Band: High; Interpretation Confidence: High Confidence; Internal Conflict Flag: No. Signal Stability Assessment: Improving; Threshold Proximity: Far; Revision Sensitivity: High.

Methodology Applied:

A Composite value above 0.75 defines an Expanding housing activity regime, favoring cyclical growth. (1)
Building permit authorizations (PERMIT) are prioritized as the primary lead indicator for the housing pipeline. (1)
Housing starts (HOUST) are used as confirmation for construction momentum. (1)
Housing Lead Signal: Latest composite observation dated 2026-01-31. (1)

Key Dynamics:

The primary driver is a surge in housing starts (Z_HOUST: 2.62), confirming a robust construction breakout. (1)
Three-month annualized starts growth (HOUST_3mAnn) reached 0.86, suggesting powerful short-term momentum. (1)
Mortgage rates (MORTGAGE30US) remain a headwind but are currently offset by the volume of new authorizations. (1)
Conditional Invalidation: A 3-month composite change less than -0.60 would signal a rapid regime deterioration. (1)
Signal stability is improving as the composite moved from 0.07 in November to 1.20 in January. (1)

Scenario Balance:

Base Case dominant: Sustained expansion driven by the existing permit-to-start pipeline momentum.
Upside secondary: Acceleration in permits if mortgage rates stabilize or decline further.
Downside residual: Demand destruction if rapid rate increases invalidate existing authorizations.

Time Horizon & Aggregation:

Time Horizon: Cyclical (months), reflecting the duration of the residential construction pipeline.
Aggregation Weight Hint: High, as housing is a primary lead for broader cyclical turning points.

Macro Relevance:

Informs the US Growth & Business Cycle dimension by gauging future residential investment.
The economic mechanism is a positive demand impulse transmitted through construction employment and durable goods demand.
Cycle position: Expanding (as defined by methodology).
Typically interacts with consumer liquidity and credit availability to confirm broader expansion.

Regime Context:

The Expanding regime is newly entered as of January 2026, following a persistent Neutral phase. (1)
Direction of change: Strengthening, with both levels and momentum metrics showing positive divergence. (1)

Model Limitations:

Significant revision risk exists for the most recent 1-3 months of data. (1)
Sensitivity to seasonal adjustment errors may occur at cyclical turning points. (1)

Data & References:

Housing Lead Signal (Latest Composite: 2026-01-31). (1)
Dominant datapoints: Z_HOUST (2.62) and Housing_Lead (1.21). (1)
Additional public datasets: FRED series for 30-Year Fixed Rate Mortgage and Building Permits.

Housing Lead Signal

Capex Intent Signal

Signal Summary:

Configuration statement (mandatory): Given a Capex_Intent score of 1.11, an ADXTNO_3mAnn of 1.32, and a DGORDER_YoY of 0.90, this setup aligns with Upward-biased price paths and Normal volatility, where the dominant risk is Trend continuation, not Mean reversion.
The signal is currently in an Expansion regime, reflecting strong durable goods momentum relative to history (1).
Conviction Band: High; Interpretation Confidence: High Confidence; Internal Conflict Flag: No. Signal Stability Assessment: Improving; Threshold Proximity: Far; Revision Sensitivity: High.

Methodology Applied:

Composite Z-Score > 0.75 classifies an Expansion phase, suggesting a rising pipeline for equipment spending (1).
Priority is given to ex-transportation orders (ADXTNO) to isolate core business investment intent (1).
3-Month Annualized vs. YoY Divergence identifies short-term momentum shifts leading the long-term trend (1).
Capex Intent Signal dataset, latest observation: 2026-01-31.

Key Dynamics:

Core momentum is accelerating, with 3-month annualized growth (Z=1.32) significantly outpacing the yearly trend (Z=1.01).
Broad-based strength is evident as both headline (DGORDER) and ex-transport (ADXTNO) components exceed the 0.75 expansion threshold (1).
The signal shows no internal tension; all primary sub-metrics are aligned in the positive quadrant.
Conditional Invalidation: A reversal of the composite Z-score below the 0.75 expansion threshold.
High persistence is observed, with the composite score rising for four consecutive months.

Scenario Balance:

Base Case dominant: Continued cyclical expansion driven by robust core equipment demand.
Upside secondary: Further acceleration if transportation orders spike alongside core durability.
Downside residual: Sudden cooling of investment intent due to exogenous shocks or credit tightening.

Time Horizon & Aggregation:

Time Horizon: Cyclical (months). Durable orders act as a leading indicator for core business investment cycles.
Aggregation Weight Hint: High. This signal provides essential lead-time for industrial sector performance and capital goods demand.

Macro Relevance:

Informs the "Global Growth & Economic Cycles" dimension by proxying core business fixed investment intent (2).
Implies an economic transmission mechanism of rising demand impulses for industrial production and capital equipment.
Cycle position: Not determined.
Typically confirms trends seen in Industrial Production and Credit Conditions (3)(4).

Regime Context:

The signal entered the Expansion regime in November 2025 and has persisted for three months (1).
Direction of change: Strengthening, with the composite score advancing from 0.79 to 1.11 since entry.

Model Limitations:

High data volatility and significant historical revisions can obscure short-term trend reliability (1).
Nominal-only measurement may inflate signals during periods of high input price inflation.

Data & References:

Capex Intent Signal: 2026-01-31 (1).
Most influential datapoint: ADXTNO_3mAnn (Z=1.318).
Comparison with ISM New Orders or regional Fed manufacturing surveys would improve depth.

Capex Intent Signal

Explicit Neutral Rate (r*) Proxy Signal

Signal Summary:

Configuration statement: Given a stance_gap of -0.62 and policy_real_proxy of 1.26, this setup aligns with Upward-biased price paths and Normal volatility, where the dominant risk is Regime shift, not Mean reversion (1).
The signal identifies an Accommodative regime driven by real policy rates remaining below the market-implied neutral rate.
Conviction Band: Medium; Interpretation Confidence: High Confidence; Internal Conflict Flag: No.
Signal Stability Assessment: Volatile; Threshold Proximity: Near; Revision Sensitivity: Unknown.

Methodology Applied:

A stance_gap of -0.50 or lower classifies the policy stance as Accommodative, supporting growth and risk assets (1).
Negative stance_gap values indicate an expansionary regime bias (1).
The neutral_drift metric identifies changes in the neutral rate context, where values within +/- 0.10 are considered Stable (1).
Explicit Neutral Rate (r*) Proxy Signal (latest observation: 2026-03-20).

Key Dynamics:

The primary driver is the stance_gap (-0.62), which remains below the -0.50 accommodative threshold (1).
Momentum has shifted back toward accommodation after a brief mid-February period of "Near neutral" alignment.
Internal stability is supported by a "Stable" neutral_drift following a period of falling neutral rate context.
Conditional Invalidation: The stance_gap rising above the -0.50 threshold toward a "Near neutral" classification.
The signal is currently volatile, having transitioned between regimes twice in the last thirty days.

Scenario Balance:

Base case dominant: Accommodative conditions persist, providing an expansionary impulse to the broader economy.
Upside risk: Rising neutral rate (r*) drift reduces the effective restrictiveness of any future rate hikes.
Downside risk: Higher-than-expected inflation persistence forces policy rates higher, closing the stance gap.

Time Horizon & Aggregation:

Time Horizon: Cyclical (months); the signal maps 10-year market anchors to policy cycles.
Aggregation Weight Hint: Medium; reflects the moderate confidence level and recent regime volatility.

Macro Relevance:

Informs the liquidity and growth dimension of the US macro environment.
Economic mechanism: Lower real policy rates relative to neutral levels reduce borrowing hurdles and stimulate risk-taking.
Cycle position: Not determined.
Typically interacts with Federal Reserve Liquidity (2) and US Inflation signals (3).

Regime Context:

Newly re-entered Accommodative regime as of mid-March.
Direction of change: Strengthening accommodation as the stance_gap deepens.

Model Limitations:

Market-implied r* includes liquidity and risk premia which may distort the "true" neutral rate.
The 10-year estimation horizon may mismatch near-term tactical policy adjustments (1).

Data & References:

Explicit Neutral Rate (r*) Proxy Signal (2026-03-20) (1).
Dominant datapoints: stance_gap (-0.62) and rstar_proxy (1.88).
Complementary datasets: US Treasury Yield Curve (4) and Credit Conditions (5).

Explicit Neutral Rate (r*) Proxy Signal