US economy & the Fed mandate

This chart is the dual-mandate scoreboard for U.S. policy: the Federal Reserve targets price stability (inflation near 2%) and maximum employment. It does not target stock prices. GDP and GDPNow add real-economy context — how much room the Fed has to ease or stay restrictive without overheating or breaking growth.

Series on the chart

• CPI (YoY): Mandate leg — inflation. Above target → restrictive bias; cooling toward 2% → easing bias.
• Unemployment (UNRATE): Mandate leg — labor. Tight jobs → wage/price stickiness; rising unemployment → easing bias.
• GDP (YoY): Official quarterly growth (lagged). Strong growth + hot CPI → "higher for longer"; weak growth + easing CPI → cut path.
• GDPNow: Atlanta Fed nowcast between releases. Direction vs last GDP print flags surprise risk into BEA and FOMC weeks.

From mandate to money & liquidity

Base liquidity is whether the system has money and cheap funding. Market liquidity is whether that money is deployed into risk. Policy and plumbing sit between this chart and asset prices:

• Policy & curve — Fed funds path and Treasury yields (yield curve, yield history on this page).
• Money stock & Fed plumbing — M2 (broad deposits and money-like assets), Fed balance sheet (reserves / QE–QT), reverse repo (cash parked at the Fed), Treasury General Account (fiscal drain or injection).
• Private credit — Banks and markets must lend and roll debt (credit stress, maturity wall).
• Market leverage — Multiples, margin, and risk appetite turn plumbing into beta; M2 can expand while assets delever if credit and risk appetite fail.

How to use it

• Compare GDPNow direction to the last official GDP print before releases.
• Hot CPI + low UNRATE → restrictive Fed; watch bear flattener on the yield curve.
• Cooling CPI + rising UNRATE → easing bias; watch bull steepener and whether credit stress eases.
• Mandate improving but credit stress worsening → policy may ease while markets still delever (liquidity trap–style).
• Rising CPI with slowing growth → stagflation-style pressure; map to Quad 3 on Macro.
• Scroll this page: mandate here → yields (policy priced) → credit & wall (will the system lever?).

Credit stress

The HYG/LQD ratio is a high-frequency stand-in for corporate credit spreads. We z-score a duration-residual of that ratio (Treasury moves stripped out) so the read is less dominated by rate shocks. Labels follow fixed σ gates; the chart shades TIGHT, WIDE, and STRESS intervals (not NORMAL).

How to use it

• Lead with the shaded regime and badge — equity risk often lags credit by days to weeks.
• WIDE → STRESS transitions warrant tighter risk checks even if SPX is still near highs.
• Pair with HYG/TLT on Breadth and the yield curve on Economy.

The Yield Curve

The Yield Curve is a forward-looking indicator for economic growth and inflation. It plots the interest rates of Treasury bonds across different maturities, from 1-month bills to 30-year bonds.

Curve Dynamics

• Normal Curve: Slopes upward as investors demand more yield for longer-duration risk. Signifies economic expansion.
• Inverted Curve: Short-term rates rise above long-term rates. Historically, a 10Y-2Y inversion has preceded every U.S. recession since 1970.

The Four Yield Curve Regimes

Yield History

Yield spreads measure the difference between long- and short-term Treasury rates. This difference represents the profit margin for banks and the overall "thirst" for credit in the economy.

The Signals

• 10Y–2Y Spread: The classic recession warning. Every U.S. recession since 1970 was preceded by this spread falling below zero (inversion).
• 10Y–3M Spread: The Fed's preferred leading indicator. It has a high correlation with economic downturns 12–18 months in advance.

The Rotation

The header badge matches the spot yield curve: Bull/Bear Steepener/Flattener from 2Y vs 10Y moves over ~3 months. Inversion (10Y–2Y below zero) is called out in the subtitle when the spread is negative.

How to use it

• Watch 10Y–2Y for the classic recession lead; 10Y–3M for the Fed-favored signal.
• Divergence between the two spreads flags mixed policy/growth messages.
• Pair with the spot yield curve shape and maturity wall on Economy.

Maturity Wall

A Maturity Wall represents a peak concentration of debt (corporate or sovereign) that is scheduled for repayment or refinancing within a compressed timeframe.

Refinancing Risk

The primary danger of a Maturity Wall is the "Interest Rate Shock." If debt issued at 2% matures during a period of 5% rates, the cost of servicing that debt more than doubles upon rollover. This "Interest Burden" acts as a massive drag on future corporate earnings and government spending.

Liquidity Drains

Funding a multi-billion dollar "Wall" requires an immense amount of market liquidity. This creates a "Cash Vacuum," where capital that would otherwise support Equities or R&D is instead diverted to satisfy debt obligations, tightening financial conditions across the board.

How to use it

• Scan for the tallest monthly bars inside the selected horizon — those are refinancing clusters.
• Pair with the yield curve: walls into inverted or steepening curves raise rollover cost risk.
• Large walls during tight credit (see Credit Stress on Economy) imply more competition for funding, not an automatic equity signal.