We systematically track the evolution of financial conditions and their underlying drivers. We intend to share regular updates of these systematic monitors with our donors on a more exclusive basis (so long as it does not compromise our public mission). This monitor is a reflection of how we think macroeconomic and policy dynamics are affecting financial conditions and, by extension, our assessment of the economic growth outlook.


  • Financial conditions have tightened on virtually every dimension other than Treasury yields. The Fed should be able to see that whether they're looking at the cost of equity capital, debt capital, credit spreads, exchange rates, equity implied volatility, or interest rate implied volatility...financial conditions are tightening. And given the tightening likely occurring outside of capital markets (via the banking channel), the case for the Fed adding more tightening is weakening.

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