Treasury spreads remain historically very narrow, inflation is growing at a sustainable rate, unemployment is near all-time lows, and the CFNAI 3-month moving average is below zero. With this in mind, the economy appears to be at a moderately-low level of risk of going into a recession.
Comments on this week’s report:
- Treasury spreads were little changed with the 10-year minus 2-year dropping one basis point to 0.16% and the 10-year minus 3-month widened by two basis points to 0.09%. Spreads still remain historically very narrow.
- The core Consumer Price Index (CPI), a measure of inflation, also saw little change in its year-over-year growth as it dropped from 2.08% to 2.04% and remains comfortably near 2.00%.
- Industrial production growth dropped as its year-over-year rate fell from 3.47% to 2.77%, yet it still shows a low level of risk as it continues to grow at a fairly sustainable rate.
- Growth in the amount of commercial business loans saw a moderate decrease as its year-over-year rate dropped from 10.33% to 10.01% and still shows no sign of high or moderate risk.