The overall risk of the economy remains moderately higher than it has in the more recent past, but still shows a relatively low amount of risk. Despite most of the listed indicators showing a “moderate” or “low” level of risk, some vigilance is warranted as the yield curve remains relatively flat and CFNAI remains below zero.
Comments on this week’s report:
- Treasury spreads remain historically very narrow as the 10-year minus 2-year spread and 10-year minus 3-month spread sit at 0.18% and 0.15%, respectively.
- Housing starts continue to fall as its year-over-year rate of change dropped from -11.47% to -14.17%, and shows a moderate level of risk. Should housing starts continue this trend, a high level of risk may be warranted and thereby should be more closely monitored.
- Growth in total business inventories dropped slightly as its year-over-year change fell from 5.21% to 4.92%, but still shows a low level of risk.
- The St. Louis Fed Financial Stress Index continues to trend lower as it drops from -1.27 to -1.31 as it nears all-time lows and shows virtually no level of risk.