Fed Funds vs. 2-Year U.S. Treasury Yield (Leading Indicator) The current 2-year U.S. Treasury yield, which is below the federal funds rate, indicates that the Fed’s monetary policy is restrictive. Furthermore, the 2-year yield typically leads the fed funds rate by about 20 weeks. Image: Morgan Stanley Research
U.S. Nonfarm Payrolls vs. U.S. ISM Manufacturing PMI The ISM manufacturing index reading below 50 indicates a contraction in manufacturing activity, which could affect payroll numbers. However, the relationship between the index and actual payrolls figures is not straightforward. Image: BofA Global Investment Strategy
Atlanta Fed GDPNow U.S. Real GDP Estimate The GDPNow model projects a 2.5% growth in U.S. real GDP for Q3 2024, suggesting a positive outlook and steady economic expansion ahead. Image: Federal Reserve Bank of Atlanta
Investor Sentiment – U.S. Market Greed/Fear Index At 78.73, the current Market Greed/Fear Index reading indicates significant market greed, reflecting optimism among market participants. Image: Real Investment Advice
U.S. 10-Year Treasury Yield – Daily Chart Factors such as easing inflation, anticipated Fed rate cuts, and moderate economic growth create a potential scenario for the U.S. 10-year Treasury yield to decline further by the end of the year. Image: BofA Global Research
Median Path of S&P 500 Around Un-Inversion in the 2s10s U.S. Treasury Yield Curve An un-inversion in the 2s10s U.S. Treasury yield curve can suggest a positive outlook for U.S. stocks, if a recession is avoided. Image: Goldman Sachs Global Investment Research
U.S. Real Prime Rate The elevated real prime rate in the U.S. has increased the financial burden on small businesses, making it more difficult for them to operate profitably and grow. Image: BofA Global Investment Strategy
U.S. 10Y-2Y Yield Curve and Recessions While a steepening inverted yield curve has historically served as a warning sign for U.S. recessions, the current economic context of expected Fed rate cuts and strong economic indicators suggests this time may be different Image: BofA Global Investment Strategy
Temporary Help Services Jobs vs. Real GDP and U.S. Recessions Temporary Help Services Jobs stand at -5.24% YoY in August. The relationship between Temporary Help Services jobs and the macroeconomy is complex. Declines in Temporary Help Services Jobs are often considered a leading indicator of a potential recession (red line at -3.5%), but they do…
Median Non-Farm Payrolls in the 12 Months Before and After the Start of a U.S. Recession Maintaining payroll growth above +100,000 jobs per month is viewed as a crucial buffer against recession fears. If this trend continues, it may provide some reassurance about the U.S. economy’s trajectory in the coming months. Image: Deutsche Bank