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: Medium Confidence
Status: Fragile Balance

Why This Regime:

Dominant drivers include accelerating Capex Intent momentum (1) and a positive Treasury yield spread maintaining its 3-month trend (2).
Dynamic weighting prioritized Capex Intent due to its Extreme Conviction band and high aggregation weight (1).
Industrial Production (3) was downweighted due to internal conflict and low confidence, while Durable Goods (4) was downweighted because missing observation data prevented classification.

Alignment & Tensions:

High-weight signals reinforce an expansionary state, as business demand for durable goods strengthens (1) alongside accommodative neutral rate settings (7).
Significant tensions exist in the housing sector, where the composite score has deteriorated rapidly from "Expanding" to "Neutral" following sharp declines in housing starts (5).
Tensions do not overturn the regime call because the core investment and monetary anchors (1)(2) currently outweigh softening residential and industrial data.

Scenario Balance:

Dominant scenario: Cyclical expansion driven by business investment, conditioned on durable orders maintaining current velocity.
Primary upside risk: A re-acceleration of industrial production above the 2% threshold with positive confirmers (3).
Primary downside risk: Housing lead indicators moving from Neutral to "Contracting" if mortgage rates sustain affordability pressure (5).

What Would Change the Regime:

A decline in the housing composite score below -0.75 (5).
The Treasury yield spread falling below 0% or dropping below its 3-month moving average (2).
Monetary policy shifting toward restrictiveness, indicated by a stance gap rising above -0.50 (7).

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 0.51 derived from positive T10Y2Y and T10Y3M z-scores, this setup aligns with Range-biased price paths and Compressed volatility, where the dominant risk is Mean reversion, not Trend continuation. (1)
The signal currently occupies a Flat/Neutral regime, reflecting a transition phase or stable policy environment (1).
Conviction Band: Medium; Interpretation Confidence: High Confidence; Internal Conflict Flag: No. Signal Stability Assessment: Stable; Threshold Proximity: Moderate; Revision Sensitivity: Unknown.

Methodology Applied:

Regime classification: Values between -0.75 and 0.75 are defined as Flat/Neutral, indicating stable policy (1).
Composite Construction: The signal averages robust z-scores of the 10Y-2Y and 10Y-3M Treasury spreads (1).
Hysteresis Rule: Exit from a regime requires crossing a +/- 0.50 threshold for two consecutive months (1).
Yield Curve Slope Signal dataset ending 2026-06-30 (1).

Key Dynamics:

The primary driver is the stabilization of both the T10Y2Y (0.38) and T10Y3M (0.64) spreads within positive territory (1).
The YC_Composite (0.51) shows stabilization after failing to breach the 0.75 Steepening threshold in early 2026 (1).
Conditional Invalidation: A move in the YC_Composite above 0.75 or below -0.75 would trigger a regime shift (1).
Persistence is high, as the neutral regime has been maintained since August 2024 (1).

Scenario Balance:

Dominant base case: Continued policy stability and neutral asset allocation as the composite remains centered (1).
Upside risk: A shift to "Steepening" (Z > 0.75) triggered by rising term premiums or expansionary growth expectations (1).
Downside risk: A return to "Inversion" (Z < -0.75) triggered by restrictive monetary policy or heightened recession fears (1).

Time Horizon & Aggregation:

Time Horizon: Cyclical (months); methodology notes lead times of 2-6 quarters for recession signals (1).
Aggregation Weight Hint: Medium; though central to macro, the neutral reading suggests limited immediate directional impulse (1).

Macro Relevance:

The signal informs market expectations of future monetary policy and term risk compensation (1).
Economic mechanism: The transition to neutral suggests an easing of the restrictive pressures typical of an inverted curve (1).
Cycle position: Not determined.

Regime Context:

The current Flat/Neutral regime is persistent, having been entered in late 2024 (1).
The recent direction reflects a stabilising trend following a peak in the composite in January 2026 (1).

Model Limitations:

Structural distortions from QE/QT and liquidity-driven noise at inflection points (1).
Signal confidence is reduced if T10Y2Y and T10Y3M spreads diverge significantly (1).

Data & References:

Yield Curve Slope Signal, latest observation: 2026-06-30 (1).
Data timeliness cannot be assessed.
Influential data: YC_Composite (0.51), T10Y3M Z-score (0.667) (1).
Suggested references: Federal Reserve monetary policy minutes and liquidity/QE data.

Yield Curve Slope Signal

U.S. Treasury Yield Curve Signal

Signal Summary:

Configuration statement: Given a Yield Spread of 0.30% exceeding its 3-month Trend of -0.023%, this setup aligns with Downward-biased price paths and Normal volatility, where the dominant risk is Regime shift, not Trend continuation. (1)
The signal is currently in a Bearish regime, reflecting a shift away from the prior Bullish/Inversion state. (1)
Conviction Band: Medium; Interpretation Confidence: High Confidence; Internal Conflict Flag: No. Signal Stability Assessment: Improving; Threshold Proximity: Moderate; Revision Sensitivity: Moderate. (1)

Methodology Applied:

A Bearish regime is triggered when the Yield Spread (GS10 - FEDFUNDS) exceeds 1.5% or moves above its 3-month Trend. (1)
A Bullish regime (recession risk) is defined by a Yield Spread at or below 0%. (1)
Economic interpretation: Measures the gap between long-term growth/inflation expectations and monetary policy tightness. (1)
U.S. Treasury Yield Curve Signal dataset, latest observation: 2026-01-01. (1)

Key Dynamics:

The primary driver is the positive Yield Spread (0.30%) maintaining position above the declining 3-month Trend. (1)
The signal shows stabilisation in Bearish territory after three consecutive months of non-inverted readings. (1)
Conditional Invalidation: The spread falling below 0% or dropping back below the 3-month moving average trend. (1)
Persistence is noted as the regime successfully transitioned from a volatile 2025 mid-year period to a sustained Bearish stance. (1)

Scenario Balance:

Dominant base case: Continued Bearish regime as long as long-term yields remain above the Fed Funds Rate.
Upside risk: A sharp steepening toward the 1.5% threshold triggered by rising inflation expectations or term premia.
Downside risk: Re-inversion (Bullish flip) if policy tightness (FEDFUNDS) overwhelms growth expectations (GS10).

Time Horizon & Aggregation:

Time Horizon: Cyclical (months) based on the 3-month trend logic and the 6-18 month lead time for recession risks. (1)
Aggregation Weight Hint: High; the yield curve is a foundational macro anchor for cross-asset risk-on/risk-off regimes.

Macro Relevance:

Informs the pricing and liquidity dimension by assessing the restrictiveness of current monetary policy. (1)
Mechanism: Current steepening implies early-cycle expansion or rising term premia, favouring risk-on/cyclical exposure. (1)
Cycle position: Not determined.

Regime Context:

Newly persistent regime; the signal has maintained a Bearish classification for three months since November 2025. (1)
Direction of change: Stabilising in a Bearish (cyclical expansionary) state. (1)

Model Limitations:

Lagging indicator with a 6-18 month window; conflates policy expectations with term premia. (1)
Revision window cannot be assessed from provided content.

Data & References:

U.S. Treasury Yield Curve Signal (2026-01-01). (1)
Influential datapoints: GS10 (4.63) and FEDFUNDS (4.33). (1)
ACM/Kim-Wright term premium estimates and real yield levels would improve reliability. (1)

U.S. Treasury Yield Curve Signal

Industrial Production Signal

Signal Summary:

Configuration statement: Given an INDPRO YoY of 1.67% and RIWG21222S growth of 17.77%, this setup aligns with Indeterminate price paths and Indeterminate volatility, where the dominant risk is Data uncertainty, not Trend continuation, as values remain below the 2% bullish threshold (1).
The signal is in a persistent Neutral regime, indicating a state of flux where growth is positive but lacks the magnitude for a pro-cyclical breakout (1).
Conviction Band: Low; Interpretation Confidence: Low Confidence; Internal Conflict Flag: Yes. Signal Stability Assessment: Improving; Threshold Proximity: Near; Revision Sensitivity: High.

Methodology Applied:

Regimes are Bullish only when INDPRO YoY > 2% and momentum is positive with at least one confirmer (1).
Mixed growth and momentum signals imply a Neutral state where outcome dispersion is high (1).
Mining share (RIWG21222S) serves as a structural modifier for confidence rather than a primary regime trigger (1).
Industrial Production Index (INDPRO), observed 2026-05-01 (1).

Key Dynamics:

Main driver is INDPRO YoY at 1.67%, which has improved from 0.58% in three months but remains below the 2% threshold (1).
Momentum is positive, but the absence of external confirmers prevents a bullish transition (1).
Internal Tension: Rising hard data momentum is not yet validated by the methodology’s required leading indicators (1).
Conditional Invalidation: INDPRO YoY growth exceeding 2% with positive confirmers (1).
The signal has shown directional improvement since early 2026 but remains stable within the Neutral band (1).

Scenario Balance:

Base case dominant: Continued Neutral regime as INDPRO growth stabilises below the expansionary threshold.
Upside secondary: Transition to Bullish triggered by INDPRO YoY > 2% and rising new orders.
Downside residual: Transition to Bearish if INDPRO YoY turns negative while mining shares rise.

Time Horizon & Aggregation:

Time Horizon: Cyclical (months) as the signal measures medium-term industrial cycle phases (1).
Aggregation Weight Hint: Low due to the Neutral status and lack of provided confirmer data (1).

Macro Relevance:

Informs the real-sector output dimension and industrial demand levels (1).
Economic mechanism: Rising production implies expansionary pressure and pro-cyclical risk appetite (1).
Cycle position: Not determined.
Typically triangulated with liquidity signals and ISM New Orders to confirm directional shifts (1).

Regime Context:

Regime persistence: Neutral since June 2025 (1).
Direction of change: Improving momentum but failing to clear structural thresholds (1).

Model Limitations:

INDPRO is subject to significant annual benchmark revisions which may alter historical regime labels (1).
The mining share component is quarterly and slow-moving, potentially lagging real-time shifts (1).

Data & References:

Industrial Production Index (INDPRO), latest 2026-05-01 (1).
Mining Value-Added Share (RIWG21222S), latest 2026-05-01 (1).
Secondary public datasets: ISM New Orders (PMI) and Durable Goods Orders to provide required confirmers.

Industrial Production Signal

Housing Lead Signal

Signal Summary:

Configuration statement: Given the combination of declining PERMIT (1413) and sharply lower HOUST (-1.28 Z-score), this setup aligns with Range-biased price paths and Normal volatility, where the dominant risk is a Regime shift toward contraction, not trend continuation (1).
The signal is currently in a Neutral regime, having transitioned from "Expanding" in February 2026 (1).
Conviction Band: Medium; Interpretation Confidence: High Confidence; Internal Conflict Flag: No. Signal Stability Assessment: Deteriorating; Threshold Proximity: Moderate; Revision Sensitivity: High.

Methodology Applied:

A composite score between -0.75 and 0.75 defines a Neutral housing cycle (1).
A 3-month change in the composite of less than -0.60 indicates rapid deterioration and high turning-point risk (1).
Building Permits (PERMIT) serve as the primary lead indicator, while Housing Starts (HOUST) provide pipeline confirmation (1).
Housing Lead Signal: Latest observation May 31, 2026; Mortgage Rates: June 30, 2026 (1).

Key Dynamics:

The primary driver is the sharp decline in HOUST (starts), which moved from a positive Z-score of 2.32 in February to -1.28 in May (1).
The composite score fell from 1.29 (February) to -0.21 (May), a total decline of 1.50, breaching the -0.60 deterioration threshold (1).
Conditional Invalidation: The current neutral-to-bearish bias would be invalidated if the composite score rises back above 0.75 (1).
The signal exhibits persistent weakening over the last four months, moving from the top of the range toward the contraction threshold (1).

Scenario Balance:

Base Case dominant: Continued Neutral regime as permits stabilize, but with a lingering downside bias due to the recent momentum collapse (1).
Upside Risk: A rapid decline in MORTGAGE30US rates (currently 6.52) could re-stimulate permit growth and restore "Expanding" status (1).
Downside Risk: The composite score drops below -0.75, triggering a formal "Contracting" regime shift and signaling a broader growth slowdown (1).

Time Horizon & Aggregation:

Time Horizon: Cyclical (months), reflecting the lead time of residential construction authorizations (1).
Aggregation Weight Hint: Medium; while the regime is Neutral, the velocity of the recent decline suggests high sensitivity for growth-oriented aggregates (1).

Macro Relevance:

This signal informs the demand impulse dimension of macro growth, specifically within residential fixed investment (1).
The transmission mechanism is affordability-driven demand; falling composite scores imply tightening financing constraints and cooling groundbreakings (1).
Cycle position: Not determined; however, the transition from Expanding to Neutral suggests a late-expansion cooling phase (1).

Regime Context:

The signal recently exited an "Expanding" regime (last seen February 2026) and has been Neutral for four consecutive months (1).
Direction of change is weakening, as the composite score approaches the lower contraction boundary (1).

Model Limitations:

Subject to frequent data revisions and seasonal adjustment errors at cycle turning points (1).
Weather-related noise can significantly distort monthly HOUST (Starts) data (1).

Data & References:

Housing Lead Signal Composite: May 31, 2026; Mortgage Rates: June 30, 2026 (1).
Most influential datapoints: HOUST Z-score (-1.28) and 3-month composite change (-1.50) (1).
Public datasets: FRED (PERMIT, HOUST, MORTGAGE30US).

Housing Lead Signal

Capex Intent Signal

Signal Summary:

Configuration statement: Given a Capex_Intent reading of 2.04 and aligned positive Z-scores for both headline and ex-transport orders, this setup aligns with Upward-biased price paths and Normal volatility, where the dominant risk is Trend continuation, not mean reversion (1).
The signal is currently in a robust Expansion regime, which has persisted for six months and is rapidly strengthening.
Conviction Band: Extreme; Interpretation Confidence: High Confidence; Internal Conflict Flag: No. Signal Stability Assessment: Improving; Threshold Proximity: Far; Revision Sensitivity: Unknown.

Methodology Applied:

Expansion Phase: Defined as Capex_Intent > 0.75, indicating unusually strong durable orders momentum and a rising pipeline for equipment spending (1).
Composition Check: Methodology prioritizes ADXTNO (Ex-Transport) to identify broad-based demand and avoid aircraft-driven distortions (1).
Inflection Detection: Compares 3-month annualized growth against Year-over-Year (YoY) rates to identify early cyclical shifts (1).
Latest dataset observation: 2026-04-30 (1).

Key Dynamics:

The primary driver is the surge in ADXTNO momentum, with its 3-month annualized Z-score reaching 2.17, confirming high-intensity business demand (1).
Momentum is currently accelerating; the Capex_Intent value has risen from 0.79 to 2.04 since November 2025.
Internal coherence is high, as headline DGORDER (17.3% YoY) and ex-transport orders (9.1% YoY) are both trending higher in tandem (1).
Conditional Invalidation: The interpretation would reverse if Capex_Intent falls below the 0.75 expansion threshold.
Signal stability is high, characterized by five consecutive months of rising intent values.

Scenario Balance:

Base Case dominant: Continued industrial expansion supported by accelerating durable goods demand and positive investment momentum.
Upside risk: A supply-side capacity squeeze if real volume demand outpaces current industrial production capacity.
Downside risk: Nominal price inflation masking a secret decline in real order volumes, as noted in methodology limitations (1).

Time Horizon & Aggregation:

Time Horizon: Cyclical (months); the signal typically leads capital expenditure cycles and cyclical earnings sensitivity.
Aggregation Weight Hint: High; the current reading is at a multi-year extreme, providing a clear directional impulse for macro aggregation.

Macro Relevance:

Informs the demand impulse dimension, specifically regarding capital expenditure and industrial equipment demand.
Economic mechanism: Rising business demand for long-lasting goods signals a transition to a high-growth phase and increased risk-on sentiment (1).
Cycle position: Not determined (mapping not provided in methodology).
Interaction: This signal typically confirms trends in PMI New Orders and Industrial Production.

Regime Context:

The signal transitioned from Neutral to Expansion in November 2025 and has remained persistent for six months.
The regime is currently strengthening, moving deeper into the expansionary zone.

Model Limitations:

The signal is subject to high monthly volatility and significant data revisions (1).
Nominal price effects may mask real volume dynamics during periods of high inflation (1).

Data & References:

Latest data point: 2026-04-30; Capex_Intent 2.036 (1).
Most influential: ADXTNO_3mAnn and Z_EX_YoY scores.
Public datasets for improvement: U.S. Industrial Production, ISM Manufacturing PMI.

Capex Intent Signal

Explicit Neutral Rate (r*) Proxy Signal

Signal Summary:

Configuration statement: Given a stance_gap of -0.83 and rising neutral_drift, this setup aligns with Upward-biased price paths and Indeterminate volatility, where the dominant risk is Trend continuation, not Mean reversion (1).
The signal currently occupies a materially accommodative regime, characterized by a policy real rate significantly below the market-implied neutral rate (1).
Conviction Band: Low; Interpretation Confidence: Mixed Signals; Internal Conflict Flag: No. Signal Stability Assessment: Stable; Threshold Proximity: Far; Revision Sensitivity: Unknown.

Methodology Applied:

Stance Gap: Values ≤ -0.50 indicate materially accommodative policy, supporting growth and risk assets (1).
Neutral Drift: A value > +0.10 signifies a rising market-implied neutral rate, reducing effective restrictiveness (1).
Data freshness is classified as Unknown; observation date (2026-06-02) is provided but timeliness cannot be assessed relative to the current window.

Key Dynamics:

The primary driver is the stance_gap (-0.83), which remains deep in the accommodative zone (1).
Neutral drift has shifted to "Rising," as the r* proxy climbed from 1.95 to 2.07 throughout May (1).
No internal tensions are present; both the level of stance and the direction of drift support an expansionary bias (1).
Conditional Invalidation: An increase in the stance_gap to above -0.50.
The signal shows high persistence, maintaining an accommodative stance for over 30 observation days (1).

Scenario Balance:

Base Case dominant: Persistent accommodation supports continued economic expansion and risk-asset tailwinds.
Upside secondary: Rising r* indicates a fundamental upward shift in growth potential or inflation expectations.
Downside residual: A sudden spike in real policy rates or a collapse in market-implied neutral rates.

Time Horizon & Aggregation:

Time Horizon: Cyclical (months), reflecting the slow-moving nature of neutral rate proxies.
Aggregation Weight Hint: Low, due to Unknown data freshness and Mixed Signals confidence.

Macro Relevance:

This signal informs the dimension of monetary liquidity and the degree of policy-induced economic friction (1).
The transmission mechanism is accommodative, implying that current policy settings are actively supporting demand rather than constraining it.
Cycle position: Not determined.
Typically confirms inflation momentum signals and contrasts with financial stress indices.

Regime Context:

This is a persistent accommodative regime, entered well before the current observation window (1).
The regime is strengthening as the gap between the neutral rate and the policy rate widens.

Model Limitations:

Real yields may be distorted by liquidity and risk premia rather than pure neutral rate expectations (1).
Revision window cannot be assessed from provided content.

Data & References:

Explicit Neutral Rate (r*) Proxy Signal (2026-06-02) (1).
Most influential: stance_gap (-0.83) and rstar_proxy (2.07) (1).
Secondary references: 10-Year Treasury Real Yields and Federal Funds Effective Rate.

Explicit Neutral Rate (r*) Proxy Signal