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.


  1. Financial conditions eased amidst AI hype: While the Fed's signaling of two additional hikes should have been the major macro and market innovation of the past week, the run-up in risk-assets this past week proved to be temporarily more dominant. When taken in totality, the major drivers of financial conditions easing are coming from pure risk premium compression, and perhaps marginally stronger global growth.
  2. Fed pricing still moves more hawkishly: The front-end continues to price out previously-implied Fed cuts. The combination of a more resilient growth outlook, a risk-asset rally, and a more hawkish Fed has powered front-end rates higher. Perhaps more commentators will recognize that...

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