CONVEX

Research & Analysis

Macro intelligence, breaking economic signals, scenario playbooks, and asset class views — updated continuously.

STAGFLATIONDeepeningCURRENT MACRO REGIME →

Growth is slowing while inflation remains elevated. The most challenging environment for portfolio construction.

Smart Money Positioning

CFTC positioning data, cross-asset divergences, and institutional flow signals — data-driven, no opinion.

Market Pulse

Latest Analysis

Editorial7 min readrates4d ago

The Fed's 8-4 Split Is a Coordination Problem

The April 28-29, 2026 FOMC vote was not a normal hold. It was an 8-4 decision in which one voter wanted an immediate cut and three others supported the hold while rejecting the statement's easing bias. That is not a simple hawk-versus-dove split. It is a communication problem: the committee can agree on today's rate while disagreeing on what today's language commits it to tomorrow.

Breaking3 min readGeopolitics12d ago

Trump Pauses Hormuz Operation: What the Retreat Reveals

A military stand-down mid-operation is not de-escalation, it's a negotiating move with a price tag measured in barrels.

Breaking3 min readGeopolitics12d ago

Rubio Says Offensive Over; Tehran Says Otherwise

Contradictory ceasefire signals leave Hormuz risk unresolved and oil markets in limbo

Breaking3 min readGeopolitics14d ago

Project Freedom: Washington Escorts Oil Through Hormuz

U.S. military convoy protection for neutral shipping rewrites the Persian Gulf risk calculus overnight.

Breaking3 min readEquity15d ago

Spirit Airlines Collapse Puts Aviation's Fuel Bill in Focus

A carrier already on life support meets a war-driven oil spike; the sector math no longer works.

Breaking3 min readEnergy15d ago

Syria as Hormuz Bypass: Oil's New Map Prices Monday Open

With Hormuz effectively blocked, Syria's corridor role reframes the entire Middle East energy supply chain overnight.

Breaking3 min readEnergy18d ago

Trump's Iran Blockade Threat Sends WTI Past $107: What Comes Next

A prolonged U.S. naval blockade of Iran would remove roughly 1.5–2 mb/d from a market already running tight on OPEC+ discipline.

Breaking3 min readGeopolitics19d ago

China's Sulphuric Acid Export Ban: Supply Chain Weaponization Arrives

Beijing's reported move targets the chemical backbone of fertiliser and metal processing worldwide

Breaking3 min readCredit21d ago

Hormuz Closure Threat Meets Mag-7 Earnings: Credit Is the Canary

Futures slide into thin liquidity while HY spreads sit near cycle tights, that gap is the story.

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Tracked Scenarios

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Active Scenario

BOJ Policy Normalization

The Bank of Japan raises its policy rate above 0.5% or materially accelerates its YCC exit, triggering a significant yen carry trade unwind. Yen strengthening causes forced deleveraging across global risk assets as carry-funded positions are unwound, repricing global term premia and compressing risk appetite in high-beta markets.

Scenario Tracker

Credit Crisis / Stress Event

A significant credit event — HY spreads widening above 600bps, a CDS index spike, or a major corporate/sovereign default — triggers a liquidity withdrawal cycle and contagion across credit markets. This represents a non-linear stress regime where normal correlation structures break down and flight-to-safety flows dominate.

Scenario Tracker

Trade War Escalation

Major new tariff announcements (>$50B in affected trade) between the US and China/EU, triggering retaliatory measures, supply chain disruption, and input cost inflation across manufacturing and technology sectors.

Scenario Tracker

Energy Supply Shock

A major disruption (>2M bbl/d equivalent) to global energy supply through geopolitical conflict, sanctions enforcement, or infrastructure failure, driving Brent above $100 and triggering secondary inflation effects in importing economies.

Scenario Tracker

US Fiscal Dominance

Monetary policy becomes subordinated to fiscal needs as the US debt/GDP ratio forces the Fed to implicitly cap real rates, even at the cost of higher inflation. Long-end yields detach from Fed guidance as term premium reprices.

Monitoring

Hard Landing / Recession

The US enters a full recession with 2 consecutive quarters of negative real GDP growth, accompanied by rapid unemployment rise above 5% and disinflation as demand collapses. Distinct from stagflation: inflation falls rather than persists, creating a classic deflationary bust with widening credit spreads and flight to safety.

How we compute scenario probabilities →

Asset Class Signals

btc
BEARISHLOW

IF CFTC BTC net spec remains at 100th pctile (maximum crowding, 1,441 net long) AND net liquidity contracts (-$114bn 1M) AND hot CPI triggers risk-off repricing AND no new institutional catalyst emerges THEN BTC consolidates with DOWNSIDE SKEW toward $68,000-72,000 BECAUSE maximum spec crowding means the marginal buyer is exhausted, and any risk-off catalyst (hot CPI confirmed, credit stress building) triggers a violent unwind of the 100th pctile long position.

equities
NEUTRALLOW

IF credit-equity divergence (HYG -5.4% vs SPY 20D, z-score -1.6, 73% historical resolution bearish) resolves historically AND breadth non-confirmation persists (SPY +4.8% vs RSP +0.2% 20D) AND hot CPI pressures growth/tech multiples THEN SPX has NEGATIVE SKEW toward 6,800-7,200 over 4-8 weeks BECAUSE credit leads equities lower 73% of the time. HOWEVER, IF ES CFTC crowded short (98th pctile, -98,581) and NAAIM near-zero (2.0) create a mechanical squeeze on geopolitical de-escalation catalyst (Trump-Xi meeting) THEN the pain trade is UP and the bearish thesis faces a violent counter-move to 7,600-7,800.

oil
BULLISHLOW

IF CFTC WTI crowded shorts (6th pctile, -34,061 net) provide a mechanical floor AND energy supply shock risk (20% probability, HOT heat) creates asymmetric upside AND tariff reinstatement adds inflationary impulse AND WTI sustains above $95 THEN WTI targets $105-115 (market price basis) over 4-8 weeks BECAUSE the crowded short creates a mechanical bid on any supply disruption, and the stagflation regime with tariff-driven inflation keeps energy prices structurally elevated.

gold
BULLISHMODERATE

IF CFTC gold positioning remains at 2nd pctile (specs maximally short, 163,303 net) AND real 10Y TIPS stays below 2.25% (currently 1.95%, +6bp 1M, ACCELERATING but contained) AND stagflation regime deepens (40% base case) AND hot CPI confirms inflation persistence THEN gold targets $5,000-5,200 over 4-8 weeks BECAUSE every spec short is a potential forced cover (mechanical bid), central bank/sovereign demand is price-insensitive and structural, and gold performs positively across stagflation (40%), hard landing (20%), and inflation re-acceleration (15%) scenarios = 75% combined probability.

dollar
NEUTRALLOW

IF hot CPI triggers short-term hawkish repricing (Fed holds longer, rate differential advantage preserved) AND tariff reinstatement (10% global) provides short-term USD support AND geopolitical de-escalation reduces safe-haven demand THEN DXY oscillates in a RANGE with SHORT-TERM UPSIDE BIAS (near-term) before STRUCTURAL BEARISH FORCES reassert (medium-term) BECAUSE the -1.7σ z-score (historically cheap) limits further downside near-term, while twin deficits and reserve diversification cap the upside.

bonds
BEARISHMODERATE

IF hot CPI print (confirmed, pending event) triggers hawkish repricing AND 30Y above 5% (threshold crossed) signals fiscal dominance concerns AND term premium continues to rise (+8bp 1M, ACCELERATING) AND tariff reinstatement adds structural inflation impulse THEN 10Y yields break above 4.70% and 30Y sustains above 5.10% over 4-8 weeks BECAUSE the inflation floor (Cleveland nowcast 5.28%, pipeline building) prevents a sustained bond rally, while the fiscal dominance narrative (term premium rising, TGA building) adds a structural supply premium.

Full regime analysis →

Key Risks

Full analysis →
  • -HOT CPI CONFIRMED (already occurred, 24h ago) — Bonds sell off (yields spike toward 4.65-4.70%), USD rallies short-term, growth/tech equities under pressure. This is the base case catalyst, not a tail risk. Probability: CONFIRMED.
  • -BOJ Policy Normalization (30% probability, HOT heat) — If BOJ raises rates above 0.5%, yen carry unwind sends SMH -8-15%, Mag-7 lower, BTC -20-25%, and triggers global risk-off. This is the most underpriced tail risk in the book. Monitoring: JPY/USD below 148.
  • -Energy Supply Shock (20% probability, HOT heat) — WTI spikes to $120-130, CPI adds 0.5-1pp, Fed forced to hike. Bonds sharply bearish, gold bullish, equities mixed (energy up, growth down). Monitoring: CFTC WTI crowded short creates violent squeeze on any supply headline.
  • -Equity Short Squeeze (25-30% probability) — ES CFTC at 98th pctile net short + NAAIM at 2.0 + geopolitical de-escalation (Trump-Xi) = violent squeeze to 7,600-7,800. This is the primary risk to the bearish equities thesis. Monitoring: SPX above 7,500 on volume.
  • -Real Yield Spike Above 2.25% (15% probability) — If hot CPI triggers hawkish repricing that pushes 10Y TIPS above 2.25%, gold thesis is invalidated. Gold could fall to $4,200-4,400. Monitoring: 10Y TIPS daily close above 2.10% (warning level).
  • -Hard Landing / Credit Event (20% probability) — HY OAS breaks 450bp, regional bank stress escalates, Sahm Rule triggers. Bonds rally sharply, equities -15-20%, gold +10-15%, dollar initially bullish then bearish. Monitoring: HY OAS above 3.50%, KRE below $40.
  • -Tariff Escalation Beyond 10% (45% probability, WARM heat) — If US-China trade war escalates further (retaliatory tariffs, tech export controls), supply chain pressures intensify, inflation pipeline accelerates, and EM currencies weaken. Monitoring: Trump-Xi meeting outcome.

Macro Themes

Inflation Trajectory

PIPELINE IS BUILDING AND ACCELERATING. PPI 3M momentum at +2.1% (accelerating faster than CPI). CPI 3M at +1.5%. PCE 3M at +0.7%. The pipeline lag suggests CPI will re-accelerate in coming months. Cleveland Fed CPI nowcast at 5.28% (alarming — well above current reported CPI). Cleveland Core CPI nowcast at 2.56%. Cleveland PCE nowcast at 4.58%. 5Y breakeven at 2.69% (+10bp 1M, ACCELERATING). 10Y breakeven at 2.47% (+10bp 1M, ACCELERATING). 5Y5Y forward at 2.24% (+9bp 1M, ACCELERATING). Breakeven slope inverted (-22bp, 10Y-5Y) — market pricing near-term inflation fears above long-term. Shelter CPI at +0.7% 3M (sticky). Supercore at +0.7% 3M (sticky). The hot CPI print (pending event) CONFIRMS the pipeline signal. Tariff reinstatement (10% global) adds a structural 1-2pp impulse over 6-12 months. WHAT IS PRICED vs REALITY: Market is pricing 2.47% 10Y breakeven — this appears LOW given Cleveland nowcast at 5.28% and pipeline building. The market may be underpricing the inflation persistence, creating a bearish bond setup and a bullish gold setup.

Read more →

Real Rates Outlook

10Y TIPS at 1.95% (+6bp 1M, ACCELERATING higher). 5Y TIPS at 1.43% (+11.72% 1M in percentage terms, ACCELERATING). Real yield curve slope 5s10s at 52bp (steep, unusual — market pricing higher real rates at longer end). Real yields are RISING and ACCELERATING — this is a headwind for gold (partially), growth equities (discount rate rising), and housing (already reflected in XHB -14.3% 20D). The hot CPI print will push nominal yields higher; if breakevens rise proportionally, real yields may stay contained. But if the Fed signals 'higher for longer' credibly, real yields could break above 2.25% on the 10Y — the key threshold for gold thesis invalidation. Term premium at 70bp (+8bp 1M, ACCELERATING) — investors demanding more compensation for duration risk. This is structurally bearish for long-duration bonds and growth equities. The 30Y above 5% (threshold crossed) is a significant regime signal — fiscal dominance concerns are being priced.

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Dollar Outlook

DXY broad at 118.04 (-0.27% 1M, DECELERATING weakening — rate of decline slowing). Market price DXY at 98.227 (April 18 data — stale, 26 days old). EUR/USD at 1.1773 (-0.15% 1M, STABLE). JPY/USD at 156.64 (-1.43% 1M, yen strengthening slightly). Dollar z-score at -1.7σ (historically low — structural undervaluation). COMPETING FORCES: BEARISH dollar — twin deficits (trade balance -$60.3bn), reserve diversification (foreign Treasury holdings flat at $9.2T despite rising issuance), structural overvaluation unwinding, geopolitical de-escalation reducing safe-haven demand. BULLISH dollar — hot CPI triggers hawkish repricing (Fed holds longer), tariff reinstatement (short-term USD strength), risk-off from credit-equity divergence. NET ASSESSMENT: The hot CPI print creates a SHORT-TERM bullish dollar impulse (hawkish repricing) that conflicts with the STRUCTURAL bearish thesis. The -1.7σ z-score means the dollar is already historically cheap on a broad basis, limiting further downside near-term. Expect range-bound with upside bias in the near term (2-4 weeks) before structural bearish forces reassert.

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Energy & Geopolitical Risk

WTI at $100.98 (market price), FRED series at $101.56 (+9.12% 1M, ACCELERATING). Brent at $106.11 (+4.21% 1W, ACCELERATING). Energy supply shock scenario at 20% probability (HOT heat). CFTC WTI net spec at -34,061 (6th pctile, CROWDED SHORT) — mechanical bid on any supply disruption. Geopolitical context is MIXED: Trump-Xi meeting (de-escalation signal, risk-on) vs. US-Iran tensions (Trump 'downplays differences' — ambiguous). The tariff court ruling (10% global tariff reinstated) is inflationary for energy via supply chain costs and potential retaliatory measures affecting energy trade. Natural gas at $2.82 (+4.44% 1W, ACCELERATING). GSCPI at 0.68σ elevated — supply chain pressures building. Energy is a key inflation transmission mechanism: if WTI sustains above $100, CPI energy component will add 0.3-0.5pp to headline CPI over next 2-3 months. This reinforces the stagflation regime. The crowded short in WTI creates asymmetric upside risk on any supply disruption — the 20% energy supply shock scenario would see WTI spike to $120-130 rapidly.

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Scenario Playbooks

What happens to every asset class when key macro events occur. 100+ scenarios, backed by historical data.

10Y-2Y Yield Spreadinverts (goes negative)

What Happens When the Yield Curve Inverts?

What happens to stocks, bonds, and the economy when the yield curve inverts? A historically reliable recession signal explained with live data.

VIXexceeds 30

What Happens When the VIX Exceeds 30?

What happens when the VIX fear gauge spikes above 30? Historical analysis of extreme volatility events, market reactions, and contrarian opportunities.

Federal Funds Ratedecreases (Fed begins easing)

What Happens When the Fed Cuts Rates?

What happens to stocks, bonds, gold, and Bitcoin when the Federal Reserve cuts interest rates? Historical patterns and market playbooks for Fed easing cycles.

Federal Funds Rateincreases (Fed begins tightening)

What Happens When the Fed Raises Rates?

What happens to markets when the Federal Reserve raises interest rates? Rate hike cycle impacts on stocks, bonds, housing, and crypto explained.

CPI (All Urban)comes in above consensus expectations

What Happens When CPI Surprises Hot?

What happens to markets when CPI inflation data comes in hotter than expected? Bond selloffs, Fed hawkishness, and portfolio positioning explained.

Sahm Rule Recession Indicatorexceeds 0.5%

What Happens When the Sahm Rule Triggers?

What happens when the Sahm Rule recession indicator triggers? Every historical instance, market impacts, and what it means for your portfolio.

HY Credit Spread (OAS)exceeds 500 basis points

What Happens When High-Yield Spreads Blow Out?

What happens when junk bond credit spreads widen past 500 bps? Credit crises, contagion risk, and the flight to quality explained with live data.

Trade-Weighted Dollar (Broad)surges (rapid appreciation)

What Happens When the Dollar Strengthens Sharply?

What happens when the US dollar surges? Impact on emerging markets, commodities, corporate earnings, and global financial stability.

WTI Crude Oilsurges (rapid price increase)

What Happens When Oil Prices Spike?

What happens when oil prices spike? Inflation fears, consumer squeeze, recession risk, and the complex impact on stocks, bonds, and the dollar.

Case-Shiller Home Price Indexdeclines (year-over-year price drops)

What Happens When the Housing Market Crashes?

What happens when US home prices crash? The wealth effect, banking stress, and cascading economic impacts of a housing downturn explained.

Unemployment Rate (U3)increases significantly

What Happens When Unemployment Rises?

What happens when the unemployment rate rises? Consumer spending impacts, market reactions, and the economic feedback loop explained.

Gold (Spot)breaks sharply higher

What Happens When Gold Surges?

What happens when gold prices surge? The risk-off signal, inflation hedge demand, central bank buying, and portfolio implications explained.

Bitcoindrops 30% or more

What Happens When Bitcoin Crashes?

What happens when Bitcoin crashes 30%+? Crypto contagion, risk-off cascades, and whether BTC drawdowns spill into traditional markets.

10Y Treasury Yieldweak auction demand (high tail, low bid-to-cover)

What Happens When a Treasury Auction Fails?

What happens when Treasury auctions see weak demand? Fiscal dominance concerns, yield spikes, and the threat to the global financial system.

5Y5Y Forward Inflationexceeds 3%

What Happens When Inflation Expectations De-Anchor?

What happens when long-term inflation expectations break above 3%? Fed credibility crisis, policy dilemma, and the risk of a 1970s-style wage-price spiral.

Fed Funds Target (Upper)held unchanged after a hiking cycle

What Happens When the Fed Pauses Rate Hikes?

What happens to markets when the Fed stops raising rates? Historical patterns from rate pauses, asset class playbooks, and what comes next after the final hike.

Trade-Weighted Dollar (Broad)falls more than 10% from recent highs

What Happens When the Dollar Crashes?

What happens to global markets when the US dollar drops sharply? Impact on commodities, emerging markets, US equities, and the global financial system.

Copper Price (Global)rises sharply (20%+ from recent lows)

What Happens When Copper Surges?

What happens when copper prices surge? Why "Dr. Copper" is the economy's best diagnostician, and what it means for equities, inflation, and global growth.

S&P 500 ETF (SPY)declines 20% from 52-week high (bear market)

What Happens When the S&P 500 Drops 20%?

What happens when the stock market enters a bear market? Historical patterns, recovery timelines, asset class reactions, and what separates crashes that recover quickly from those that grind lower.

Gold (Spot)exceeds $3,000 per ounce

What Happens When Gold Hits $3,000?

What does gold at $3,000 mean for the global economy? Analysis of what drives gold to record highs and the implications for currencies, bonds, equities, and inflation.

Initial Jobless Claimsrises above 300,000 (sustained)

What Happens When Initial Jobless Claims Spike?

What happens when weekly jobless claims surge? The highest-frequency recession indicator, what levels matter, and how markets respond to rising layoffs.

WTI Crude Oilfalls below $50 per barrel

What Happens When Oil Drops Below $50?

What happens when crude oil crashes below $50? Deflationary signals, energy sector carnage, consumer benefits, and geopolitical implications.

VIXfalls below 12

What Happens When the VIX Drops Below 12?

What happens when market volatility hits extreme lows? The risks of complacency, historical parallels, and how to position when fear disappears from markets.

10Y Real Yield (TIPS)falls below 0%

What Happens When Real Rates Go Negative?

What happens when real interest rates turn negative? Financial repression, the war on savers, and how assets reprice when holding cash guarantees losing purchasing power.

Consumer Sentiment (Michigan)drops below 60 (or falls 20+ points)

What Happens When Consumer Confidence Collapses?

What happens when consumer sentiment craters? Does it actually predict spending? Historical analysis of confidence crashes and what they mean for markets.

10Y-2Y Yield Spreadrises sharply (50+ bps in weeks)

What Happens When the Yield Curve Steepens Sharply?

What happens when the yield curve steepens rapidly? Bull steepener vs bear steepener, recession timing, and the implications for banks, bonds, and equities.

HY Credit Spread (OAS)falls below 300 bps (record tight territory)

What Happens When Credit Spreads Hit Record Tights?

What happens when high yield credit spreads compress to historically tight levels? The risks of complacency in corporate credit, what it means for risk appetite, and how to position.

Bitcoinblock reward halving event occurs (~every 4 years)

What Happens When Bitcoin Halves?

What happens to Bitcoin after a halving? Historical price cycles, supply shock mechanics, miner economics, and how halving interacts with macro conditions.

30Y Mortgage Raterises above 7% (or surges 200+ bps in a year)

What Happens When Mortgage Rates Spike?

What happens when 30-year mortgage rates spike? Impact on housing affordability, homebuilders, banks, consumer spending, and the broader economy.

Trade Balancewidens significantly (exceeds -$80B monthly)

What Happens When the Trade Deficit Widens Sharply?

What happens when the US trade deficit surges? Dollar implications, tariff risk, manufacturing impact, and what it signals about relative global economic strength.

SLOOS: C&I Loan Tighteningnet tightening exceeds 30% of banks

What Happens When Banks Tighten Lending Standards?

What happens when banks pull back on lending? How tighter credit standards predict recessions, default waves, and the transmission from Wall Street to Main Street.

M2 Money Supplyyear-over-year growth turns negative

What Happens When the M2 Money Supply Contracts?

What happens when the money supply shrinks? Monetarist deflation fears, historical rarity, and implications for asset prices, inflation, and economic growth.

CNY/USDrises sharply (yuan weakens vs dollar)

What Happens When China Devalues the Yuan?

What happens when China devalues its currency? Global deflation export, emerging market contagion, commodity impact, and US equity market reactions.

OECD Composite Leading Indicatorfalls below 45 (deep contraction territory)

What Happens When ISM Manufacturing Drops Below 45?

What happens when the manufacturing sector enters deep contraction? Historical recession correlation, supply chain effects, and market reactions to collapsing factory output.

Financial Conditions (NFCI)rises above 0 (tighter than average)

What Happens When Financial Conditions Tighten?

What happens when the Chicago Fed NFCI signals tight financial conditions? How credit conditions transmit through the economy and what it means for every asset class.

10Y Breakeven Inflationfalls below 1.5% (well below Fed target)

What Happens When Breakeven Inflation Crashes?

What happens when the bond market prices in deflation? When breakeven inflation crashes below the Fed target, it signals a deflationary spiral that changes the playbook for every asset.

Personal Saving Ratefalls below 2% (near-zero savings)

What Happens When the Savings Rate Hits Zero?

What happens when Americans stop saving? The consumer spending cliff, credit card debt explosion, and what it means when the savings buffer is gone.

S&P 500 Net Speculative Positioningreaches 90th or 10th percentile of historical range

What Happens When Speculative Positioning Hits Extremes?

What happens when futures market positioning hits extreme levels? Contrarian signals, crowded trade risks, and how CFTC data helps identify turning points.

EM Dollar Indexrises sharply (dollar strengthens significantly vs EM)

What Happens When Emerging Market Currencies Crash?

What happens when emerging market currencies collapse? Contagion risk, capital flight, commodity impact, and whether EM crises spill over to US markets.

Henry Hub Natural Gasrises above $6/MMBtu (doubles from normal levels)

What Happens When Natural Gas Spikes?

What happens when natural gas prices spike? Winter heating costs, electricity prices, fertilizer costs, and the cascading economic effects of America's most volatile commodity.

Real GDPshows negative quarterly growth

What Happens When GDP Contracts?

What happens to markets, policy, and the economy when real GDP contracts? Historical playbook for recession quarters, with current data.

Sahm Rule Recession Indicatorexceeds 1.0

What Happens When the Sahm Rule Exceeds 1.0?

The Sahm Rule triggers recession alerts when unemployment rises 0.5 points. What happens when it exceeds 1.0, signaling a deepening downturn?

Leading Index for USsix-month change turns negative 2% or worse

What Happens When the Leading Economic Index Turns Negative?

The Leading Economic Index anticipates recessions by 6-12 months. What happens when its six-month change turns negative, warning of contraction ahead?

Underemployment Rate (U6)exceeds 10%

What Happens When U-6 Unemployment Exceeds 10%?

U-6 captures broader labor underutilization beyond the headline rate. What happens when it exceeds 10%, signaling widespread labor stress?

Capacity Utilizationfalls below 75%

What Happens When Capacity Utilization Falls Below 75%?

Industrial capacity utilization below 75% signals excess factory slack. What happens to inflation, earnings, and policy at these levels?

Core PCE (ex Food/Energy)exceeds 4% year-over-year

What Happens When Core PCE Exceeds 4%?

Core PCE above 4% represents severe Fed target overshoot. What happens to rates, markets, and the Fed when the preferred inflation gauge runs double target?

Federal Funds Ratefalls to 0-0.25%

What Happens When the Fed Cuts Rates to Zero?

Zero interest-rate policy (ZIRP) marks extreme monetary easing. What happens to markets, saving, and the economy when the Fed takes policy rates to zero?

10Y Treasury Yieldexceeds 5%

What Happens When the 10Y Treasury Yield Exceeds 5%?

10-year Treasury yields above 5% represent extreme tightening of financial conditions. What happens to equities, housing, and the economy at these levels?

SOFRspikes more than 20 bps above fed funds

What Happens When SOFR Spikes Above Fed Funds?

SOFR spikes signal acute funding stress in Treasury repo markets. What happens when overnight funding rates rise above the Fed target?

IG Credit Spread (OAS)falls below 100 bps

What Happens When Investment Grade Spreads Compress Below 100 bps?

IG corporate spreads below 100 bps signal credit-market complacency. What happens when investors accept minimal premium over Treasuries for corporate credit?

Credit Card Delinquency Rateexceeds 5%

What Happens When Credit Card Delinquency Exceeds 5%?

Credit card delinquency above 5% signals acute consumer stress. What happens to retailers, banks, and the consumer economy at these levels?

C&I Loans (All Banks)year-over-year growth turns negative

What Happens When Commercial & Industrial Loans Contract?

Commercial and Industrial (C&I) loan contraction signals bank credit retrenchment. What happens to growth, jobs, and investment when business credit shrinks?

Trade-Weighted Dollar (Broad)Broad Trade-Weighted Dollar Index exceeds historical extremes

What Happens When DXY Hits 120?

Extreme dollar strength creates global stress. What happens when the broad dollar index hits multi-decade highs, pressuring emerging markets and commodities?

EUR/USDEUR/USD falls to or below 1.00

What Happens When the Euro Hits Parity with the Dollar?

EUR/USD parity signals extreme dollar strength and European economic stress. What happens to European equities, ECB policy, and global markets?

JPY/USDUSD/JPY exceeds 160

What Happens When USD/JPY Exceeds 160?

Extreme yen weakness forces BoJ intervention decisions. What happens to Japanese equities, global carry trades, and Asian markets?

Gold (Spot)gold-silver ratio exceeds 90

What Happens When the Gold-Silver Ratio Exceeds 90?

Gold-silver ratio above 90 signals industrial or financial stress. What happens when gold dramatically outpaces silver, a classic late-cycle warning?

Copper Price (Global)copper-gold ratio falls to multi-year lows

What Happens When the Copper-Gold Ratio Collapses?

Copper-gold ratio collapse signals growth concerns and is often called "Dr. Copper's recession warning". What happens when the industrial-to-monetary metals ratio crashes?

Bitcoinexceeds $100,000

What Happens When Bitcoin Crosses $100,000?

Bitcoin above $100,000 marks a major psychological milestone. What happens to crypto markets, institutional adoption, and traditional finance at this level?

Russell 2000 ETF (IWM)IWM/SPY ratio rises 10%+ over 3 months

What Happens When Small Caps Outperform Large Caps?

What happens when IWM beats SPY by 10%+? Fed-pivot rotation, regional banks (KRE) leading, Russell 2000 historically up 20-40% during 2-4 year cycles.

S&P 500 ETF (SPY)Magnificent 7 weight in S&P 500 exceeds 30%

What Happens When the Magnificent 7 Exceeds 30% of S&P 500?

Extreme mega-cap concentration creates fragility. What happens when the Magnificent 7 (AAPL, MSFT, NVDA, GOOGL, AMZN, META, TSLA) represents over 30% of the index?

30Y Mortgage Rateexceeds 8%

What Happens When 30Y Mortgage Rates Exceed 8%?

30Y mortgage rates above 8% freeze the housing market. What happens to home sales, builders, and housing affordability at multi-decade rate highs?

VIXput-call ratio exceeds 1.2

What Happens When the Put-Call Ratio Spikes Above 1.2?

Put-call ratios above 1.2 signal extreme fear and hedging demand. What happens when put options demand dramatically exceeds call options?

Convex Risk Appetite IndexRisk Appetite Index exceeds 75 (extreme greed)

What Happens When Fear & Greed Index Hits Extreme Greed?

Extreme greed readings signal euphoria and contrarian sell signals. What happens when sentiment indicators hit maximum optimism?

CVRP, Convex Recession Probabilityrises above 50%

What Happens When the Convex Recession Probability Index Spikes?

What happens when the Convex Recession Probability Index signals elevated recession risk? Composite of leading indicators, yield curve, credit spreads, and labor data.

Convex Net Liquidity Indexdeclines materially

What Happens When the Convex Net Liquidity Index Contracts?

What happens when aggregate USD net liquidity contracts? Impact on risk assets, Bitcoin, and equity multiples when Fed balance sheet minus TGA minus RRP falls.

Convex Risk Appetite Indexfalls into extreme fear territory

What Happens When the Convex Risk Appetite Index Collapses?

What happens when the Convex Risk Appetite Index collapses into extreme fear? Composite of VIX, credit spreads, put-call ratios, and positioning.

Nonfarm Payrollsdeclines month-over-month

What Happens When Nonfarm Payrolls Turn Negative?

What happens when Nonfarm Payrolls (NFP) turn negative? Recession confirmation, Fed response, and historical market reactions to month-over-month job losses.

JOLTS Job Openingsfalls below 7.5M

What Happens When Job Openings Collapse?

What happens when JOLTS job openings collapse? Labor market weakness, Fed response, and implications for wage growth and consumer spending.

JOLTS Quit Ratefalls below 2.0%

What Happens When the Quits Rate Collapses?

What happens when the JOLTS quits rate collapses below 2.0%? Loss of worker confidence, wage growth deceleration, and recession risk implications.

Labor Force Participationfalls below 62%

What Happens When the Labor Force Participation Rate Drops?

What happens when the labor force participation rate drops sharply? Implications for structural growth, unemployment measurement, and Fed policy.

Avg Weekly Hours (Private)falls below 34.0 hours

What Happens When Average Weekly Hours Collapse?

What happens when weekly hours fall below 34.0? Pre-layoff labor signal: SPY estimates compress, XLY underperforms, retail sales decelerate 2-3pp YoY.

Continued Claimsrises above 2.0M

What Happens When Continuing Jobless Claims Surge?

What happens when continuing unemployment claims surge above 2.0M? Signal that unemployed workers are having trouble finding new jobs.

Real GDPdeclines quarter-over-quarter (annualized)

What Happens When Real GDP Turns Negative?

What happens when real GDP contracts? Recession definition, Fed response, and historical market behavior during negative growth quarters.

Avg Hourly Earnings (Private)exceeds 5% year-over-year

What Happens When Wage Growth Accelerates Above 5%?

What happens when average hourly earnings accelerate above 5% year-over-year? Fed response, inflation implications, and market reactions to wage pressure.

CPI: Energyrises above 20% year-over-year

What Happens When Energy CPI Spikes?

What happens when energy CPI spikes 20%+ year-over-year? Consumer spending impact, inflation expectations, and recession risk from energy shocks.

CPI: Foodrises above 10% year-over-year

What Happens When Food Inflation Surges Above 10%?

What happens when food CPI surges above 10%? Consumer sentiment impact, political consequences, and recession risk from food inflation.

CPI: Rent of Shelterturns from accelerating to decelerating

What Happens When Shelter CPI Peaks?

What happens when shelter CPI peaks and begins decelerating? Disinflation implications, Fed response, and market reactions to housing cost relief.

PPI Final Demandturns negative year-over-year

What Happens When PPI Turns Negative?

What happens when Producer Price Index turns negative? Deflation risk, margin implications, and the leading signal for CPI disinflation.

Federal Funds Rateexceeds 6%

What Happens When Fed Funds Rate Exceeds 6%?

What happens when the Fed funds rate exceeds 6%? Financial stress, economic slowdown risk, and historical precedents from restrictive policy.

30Y Treasury Yieldrises above 5%

What Happens When 30-Year Treasury Yields Surge?

What happens when 30-year Treasury yields surge above 5%? Bond market stress, fiscal concerns, and equity multiple compression.

10Y Real Yield (TIPS)rises above 0%

What Happens When 10-Year Real Yields Turn Positive?

What happens when 10-year real yields turn positive after a prolonged negative period? Impact on gold, tech stocks, and risk assets.

Overnight Reverse Repodeclines below $100B

What Happens When the Fed Reverse Repo Facility Drains to Zero?

What happens when the Fed RRP facility drains? Liquidity implications, money market dynamics, and impact on bank reserves.

Fed Balance Sheetincreases meaningfully

What Happens When the Fed Balance Sheet Expands?

What happens when the Fed restarts balance sheet expansion (QE)? Risk asset response, inflation implications, and historical precedents.

Reserve Balances at Feddeclines below $3T

What Happens When Bank Reserves Collapse?

What happens when bank reserves fall below $3T? Repo stress (SOFR +50-300bp), risk-off in SPY (5-15% drops), and potential Fed pivot back to QE.

Treasury General Accountdeclines below $300B

What Happens When the Treasury General Account Drains?

What happens when the Treasury General Account (TGA) drains? Liquidity injection effects, risk asset response, and debt ceiling implications.

SLOOS: C&I Loan Tighteningrises above 25%

What Happens When Bank Lending Standards Tighten Sharply?

What happens when banks sharply tighten lending standards? Credit contraction effects, business investment decline, and recession risk.

Credit Card Delinquency Raterises above 3.5%

What Happens When Credit Card Delinquencies Spike?

What happens when credit card delinquencies cross 3.5%? Consumer-cycle stress: XLY underperforms, regional banks (KRE) take hits, TLT bid on Fed-cut bets.

CNY/USDUSDCNY rises above 7.5

What Happens When China Devalues the Yuan Sharply?

What happens when China devalues the yuan beyond 7.5? Global deflation impulse, emerging market stress, and US trade implications.

JPY/USDUSDJPY rises above 160

What Happens When the Japanese Yen Weakens Past 160?

What happens when USDJPY breaks 160? BoJ intervention risk, carry-trade unwinds (Aug 2024 took S&P -7% and QQQ -10% in days), global VIX spikes.

Henry Hub Natural Gasfalls below $2.00

What Happens When Natural Gas Prices Collapse?

What happens when natural gas prices collapse below $2? Inflation relief, energy sector stress, and producer bankruptcy risk.

WTI Crude Oilfalls below $30

What Happens When Oil Drops Below $30?

What happens when WTI crude drops below $30? Energy (XLE) loses 30-50%, HY energy spreads blow out, 5Y breakevens fall 50-100bp, XLY benefits.

Copper Price (Global)reaches new all-time highs

What Happens When Copper Surges to All-Time Highs?

What happens when copper reaches new all-time highs? Economic signal, inflation implications, and electrification demand drivers.

Consumer Staples (XLP)outperforms XLY over 3+ months

What Happens When Defensive Sectors Lead the Market?

What happens when staples (XLP) sharply outperform discretionary (XLY)? Recession signal, defensive positioning, and sector rotation implications.

Regional Banks (KRE)declines 20% in 30 days

What Happens When Regional Banks Come Under Stress?

What happens when regional bank stocks (KRE) drop sharply? Deposit flight risk, commercial real estate exposure, and Fed response.

Homebuilders (XHB)declines 25% in 90 days

What Happens When Home Builder Stocks Collapse?

What happens when home builder stocks (XHB) collapse? Housing demand destruction, recession signals, and Fed rate implications.

Retail Sales (ex Food Svc)declines 3+ months consecutively

What Happens When Retail Sales Contract?

What happens when retail sales contract for 3+ consecutive months? Consumer weakness signal, recession confirmation, and retail sector impact.

Durable Goods Ordersdeclines 10%+ month-over-month

What Happens When Durable Goods Orders Plummet?

What happens when durable goods orders plummet? Capex signal, manufacturing weakness, and investment cycle implications.

Housing Startsfalls below 1.1M annualized

What Happens When Housing Starts Collapse?

What happens when housing starts collapse below 1.1M? Housing cycle bottom signals, construction employment impact, and broader economic effects.

Semiconductors (SMH)outperforms QQQ by 15% in 6 months

What Happens When Semiconductors Rally Sharply?

What happens when semiconductors (SMH) sharply outperform? AI investment cycle, global economic implications, and tech leadership signals.

Corporate Profits After Taxrolls over from cycle peak

What Happens When Corporate Profits Peak?

What happens when corporate profits peak and begin declining? Earnings recession signal, equity market implications, and investment cycle impact.

Industrial Productiondeclines 3+ months consecutively

What Happens When Industrial Production Declines?

What happens when industrial production declines for multiple months? Manufacturing recession signals, cyclical sector impact, and GDP implications.

Inventories-to-Sales Ratiorises above 1.5

What Happens When the Inventory-to-Sales Ratio Spikes?

What happens when business inventories rise sharply relative to sales? Destocking signal, production cuts, and recession implications.

Real Disposable Incomedeclines year-over-year

What Happens When Real Personal Income Declines?

What happens when real disposable personal income declines? Consumer spending implications, savings rate changes, and recession dynamics.

Euro Stoxx 50outperforms SPY by 10%+ over 6 months

What Happens When European Stocks Outperform?

What happens when European stocks sharply outperform US equities? Sector rotation, currency implications, and relative valuation dynamics.

VSTOXXexceeds 35

What Happens When VSTOXX European Volatility Spikes?

What happens when VSTOXX European volatility exceeds 35? European stress signal, global spillover risk, and ECB policy implications.

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