The overall risk of the economy is moderately higher than it has more recently been as the treasury yield curve continues to flatten and the CFNAI three-month average drops below zero. However, GDP growth, industrial production growth, and rates of inflation continue to grow at sustainable rates.
Comments on this week’s report:
- Treasury yield spreads narrowed as the 10-year minus 2-year spread dropped to 0.14% and the 10-year minus 3-month spread dropped to 0.11%.
- The Chicago Fed National Activity Index (CFNAI) three-month moving average dropped from 0.00 to -0.18 as four of the five CFNAI’s composite indexes dropped below zero, raising its level of risk to “Moderate”.
- The St. Louis Financial Stress Index inched slightly lower and remains near all-time lows as it dropped from -1.22 to -1.26, indicating no sign of financial stress and a low level of risk.