The overall risk of the U.S. economy to experience a near-term recession remains moderately low.  However, narrow treasury spreads, a slowdown in Industrial Production, and lower trending CFNAI indicate that the U.S. economy may be entering a late-cycle phase.

Comments on this week’s report:

  • Treasury spreads were little changed on the week with the 10-year minus 2-year falling from 0.26% to 0.25% and the 10-year minus 3-month increasing from -0.02% to 0.02%.
  • The CFNAI three-month moving average extends its streaks of below zero readings to five (months) as it rises from -0.27 to -0.26, which currently indicates a moderate level of risk.
  • U.S. housing starts dropped by nearly 1.0% in June while its year-over-year growth rate jumped from -5.03% to 6.19% and currently indicates a low-level of risk, however it should be noted that housing starts tend to be volatile.
  • The St. Louis Fed Financial Stress index continues to trend towards an all-time low as it falls from -1.38 to -1.36 and currently indicates a very low level of risk.
Please Note: Due to various factors, including changing market conditions, this content may no longer be reflective of current opinions or positions. This report is for informational purposes only and should not be regarded as a substitute for independent research and personalized investment advice.

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