Threshold Reference

Hybrid system: Economic green zones (what range represents healthy conditions?) + P10/P90 statistical red tails (what's historically extreme?). Yellow fills the gap between healthy and extreme on each side. Some metrics have edge cases where the statistical tail falls inside the green zone — in those cases, the yellow zone extends to the green boundary with no red on that side.

Interest Rates

Real Fed Funds Real Fed Funds - actual policy stance
Deep Repression < -1.39
Financial Repression -1.39 – 0.00
Neutral Policy 0.00 – 1.50
Restrictive 1.50 – 4.35
Severely Restrictive > 4.35
Fed Funds Fed Funds Rate - Fed's main policy tool
Emergency Easing < 0.16
Accommodative 0.16 – 2.00
Normal Range 2.00 – 4.00
Restrictive 4.00 – 9.21
Severely Restrictive > 9.21
10Y Treasury 10Y Treasury - long-term rate benchmark
Flight to Safety < 2.23
Suppressed Yields 2.23 – 3.00
Fair Value 3.00 – 4.50
Fiscal Strain 4.50 – 9.36
Bond Crisis > 9.36
10Y TIPS Yield 10Y TIPS yield - real interest rates
Negative Real Rates < -0.59
Below Neutral -0.59 – 0.50
Near Neutral 0.50 – 1.50
Above Neutral 1.50 – 2.19
Overtightening > 2.19
10Y Breakeven Breakeven inflation - market's expectation
Deflation Risk < 1.59
Below Target 1.59 – 1.80
Anchored 1.80 – 2.40
Drifting High 2.40 – 2.50
Unanchored > 2.50
2Y-10Y Spread Yield curve spread - recession indicator
Deep Inversion < -0.27
Inverted -0.27 – 0.00
Normal Slope 0.00 – 1.50
Steep Curve 1.50 – 2.20
Extremely Steep > 2.20

Inflation

Core PCE YoY Core PCE inflation - Fed's preferred measure
Deflation Risk < 1.24
Below Target 1.24 – 1.50
Near Target 1.50 – 2.50
Running Hot 2.50 – 2.99
Overheating > 2.99
Core CPI YoY Core CPI inflation - consumer price measure
Deflation Risk < 1.56
Below Target 1.56 – 2.00
Near Target 2.00 – 3.00
Elevated 3.00 – 3.30
Overheating > 3.30
UMich Inflation Exp UMich inflation expectations - consumer price outlook
Very Subdued < 2.50
Anchored 2.50 – 3.50
Elevated 3.50 – 4.30
Unanchored > 4.30
1Y Inflation Exp 1Y inflation expectation - near-term inflation forecast
Deflation Risk < 0.50
Below Target 0.50 – 1.50
Anchored 1.50 – 3.50
Above Target 3.50 – 5.00
Unanchored > 5.00

Labor Market

Unemployment Unemployment rate - labor market health
Very Tight < 3.50
Full Employment 3.50 – 4.50
Slack Building 4.50 – 7.80
Recessionary > 7.80
Jobless Claims Jobless claims - early warning for labor stress
Very Tight < 200K
Healthy Churn 200K – 280K
Rising Layoffs 280K – 468K
Layoff Surge > 468K
Job Openings Job openings - labor demand indicator
Weak Demand < 3K
Soft Demand 3K – 5K
Healthy Demand 5K – 8K
Strong Demand 8K – 9K
Overheating > 9K

Credit & Liquidity

BBB Spread BBB spread - credit market stress
Tight Spreads < 1.20
Healthy Pricing 1.20 – 2.00
Stress Emerging 2.00 – 2.80
Credit Stress > 2.80
High Yield Spread High yield spread - junk bond risk
Reaching for Yield < 3.00
Normal Risk Appetite 3.00 – 5.00
Risk Aversion 5.00 – 8.08
Credit Crisis > 8.08

Money Supply

M2 Growth M2 growth - money supply trend
Monetary Contraction < 2.85
Tightening 2.85 – 5.00
Monetary Neutral 5.00 – 7.00
Excess Liquidity 7.00 – 11.4
Money Flood > 11.4
M2 Velocity M2 velocity - money turnover rate
Stagnant < 1.17
Sluggish 1.17 – 1.30
Post-QE Normal 1.30 – 1.55
Accelerating 1.55 – 1.65
Rapid Turnover > 1.65

Consumer Health

Savings Rate Savings rate - consumer financial buffer
Depleted < 2.75
Stretched 2.75 – 4.00
Adequate Buffer 4.00 – 7.00
Elevated Saving 7.00 – 7.25
Hoarding > 7.25
Consumer Sentiment Consumer sentiment - spending indicator
Despair < 65.5
Pessimistic 65.5 – 80.0
Confident 80.0 – 95.0
Very Bullish 95.0 – 99.7
Euphoric > 99.7
Card Delinquency Card delinquency - consumer stress
Very Low < 2.00
Normal 2.00 – 3.50
Stress Building 3.50 – 4.98
Consumer Distress > 4.98
Debt Service Ratio Debt service ratio - consumer debt burden
Light Burden < 10.0
Manageable 10.0 – 12.5
Heavy Burden 12.5 – 15.5
Crushing > 15.5
Real Wage Growth Real wage growth - purchasing power trend
Falling Behind < -1.50
Losing Ground -1.50 – 0.00
Keeping Pace 0.00 – 1.50
Strong Gains 1.50 – 2.39
Wage Spiral Risk > 2.39

Markets

Crude Oil Oil price - input cost for economy
Demand Collapse < 17.3
Supply Glut 17.3 – 55.0
Balanced Market 55.0 – 80.0
Inflation Risk 80.0 – 92.6
Oil Shock > 92.6
Dollar Index Dollar strength - currency impact
Dollar Crisis < 90.5
Weak Dollar 90.5 – 95.0
Stable Dollar 95.0 – 105
Strong Dollar 105 – 121
Dollar Surge > 121
VIX VIX - market fear gauge
Low Volatility < 14.0
Normal Uncertainty 14.0 – 20.0
Elevated Fear 20.0 – 28.6
Panic > 28.6
Market Breadth Market breadth - positive = narrow leadership
Mega-Cap Drag < -10.0
Broad Participation -10.0 – -3.00
Normal Breadth -3.00 – 5.00
Narrow Rally 5.00 – 10.0
Extreme Concentration > 10.0

Fiscal

Debt/GDP Debt/GDP - fiscal sustainability measure
Improving < 80.0
Sustainable 80.0 – 100
Unsustainable > 100

Growth

GDPNow GDPNow - real-time GDP growth estimate
Contraction < 0.00
Stalling 0.00 – 1.50
Healthy Growth 1.50 – 3.00
Running Hot 3.00 – 5.00
Overheating > 5.00
Weekly Economic Index WEI - weekly GDP growth proxy
Contraction < 0.00
Stalling 0.00 – 1.50
Healthy Growth 1.50 – 3.00
Running Hot 3.00 – 5.00
Overheating > 5.00