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.
- The big story this past week was about US growth resilience: In terms of both markets and the actual data releases, growth outcomes re-rated to the upside. Manufacturing and housing look to be exiting contraction, while the jobless claims data seems less recessionary after adjusting for Massachusetts-specific distortions. It's not a surprise then to see higher equity prices, higher bond yields higher, and a stronger dollar. Our capital markets proxy of implied US growth improved robustly. All of this is consistent with what our activity dashboards have been signaling: a US economy that is simultaneously growing, slowing, and stabilizing.
- Regional bank tail risks abated:
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