Macro Regime — Where Are We in the Cycle?
Multi-dimensional regime classification · Proprietary models · Updated daily
Growth
88% confidenceExpansion
Is the economy expanding or contracting? Based on GDP, employment, industrial production, and leading indicators.
Market
100% confidenceNeutral
Is the stock market in a bull, bear, or correction regime? Based on price trends, volatility, and breadth.
Inflation
58% confidenceStable
Is inflation accelerating, stable, or decelerating? Based on CPI components and inflation expectations.
Financial Conditions
90% confidenceNeutral
Are financial conditions loose or tight? Based on credit spreads, lending standards, and monetary policy.
What this means
The economy is currently classified as Expansion on the growth dimension, with Neutral market conditions. There is some divergence across dimensions — mixed signals that warrant attention.
The MacroRadar Sentiment Index reads 65 (Greed). Elevated sentiment suggests confidence but may indicate complacency.
Historical context
The current macro configuration — expansion growth, neutral markets, stable inflation, neutral financial conditions — most closely resembles May 2024, a period that was not followed by a recession within 24 months.
Across the 5 most similar historical periods, 2 were followed by a recession (average lead time: 11 months) and 3 saw continued expansion. This is not a prediction — it shows the range of outcomes from environments that looked like today.
MacroRadar Risk Score — Historical (1985–Present)
Composite risk score combining cross-dimensional regime signals. Higher readings have historically preceded market stress.
Regime Probabilities — Historical (1985–Present)
How probability mass has shifted between economic regimes over 40 years. Green dominance = expansion. Red spikes = approaching recession.
Regime Transition Forecast
Estimated probability of each regime at 3, 6, and 12 month horizons
| Regime | 3 months | 6 months | 12 months |
|---|---|---|---|
| expansion | 93.7% | 0.0% | 0.0% |
| late cycle | 2.7% | 0.0% | 0.0% |
| slowdown | 2.4% | 0.0% | 0.0% |
| contraction | 0.6% | 0.0% | 0.0% |
| reflation | 0.5% | 0.0% | 0.0% |
For a dedicated recession risk assessment, see the recession probability model →
Indicator Divergences
When indicators that usually move together start diverging, it often signals a regime transition ahead
Consumer sentiment and leading index diverging: sentiment at 0p, leading at 77p
Building permits and industrial production diverging: permits at 47p, production at 90p
Sahm rule and initial claims neutral: Sahm at 61p, claims at 25p
VIX and credit spreads neutral: VIX at 40p, spreads at 8p
Fed funds and HY spread neutral: fed funds at 66p, spread at 8p
Housing starts and permits neutral: starts at 72p, permits at 47p
VIX and unemployment neutral: VIX at 40p, unemployment at 61p
Yield curve 10Y-3M and leading index confirming: curve at 58p, leading at 77p
Yield curve and unemployment confirming: curve at 51p, unemployment at 61p
Credit spreads and consumer sentiment confirming: spreads at 8p, sentiment at 0p
Most Similar Historical Periods
Based on multi-dimensional macro state distance — which past environments most resemble today?
| Period | Similarity | Recession followed? |
|---|---|---|
| 2024-05-01 | 75% | No (within 24 months) |
| 2006-08-01 | 75% | Yes — in 17 months |
| 2013-10-01 | 72% | No (within 24 months) |
| 1996-05-01 | 72% | No (within 24 months) |
| 2007-09-01 | 72% | Yes — in 4 months |
How this regime affects portfolios
The current regime classification drives MacroRadar's portfolio allocation. Each regime has a historically optimized asset mix based on walk-forward backtesting since 1990.
Frequently Asked Questions
What is a macro regime?
A macro regime describes the current state of the economy across multiple dimensions — growth, inflation, financial conditions, and market behavior. Rather than looking at individual data points, regime classification identifies the overall pattern. For example, 'late-cycle expansion with rising inflation and tightening financial conditions' is a regime that has historically preceded market corrections.
How does MacroRadar classify economic regimes?
MacroRadar uses proprietary machine learning models across multiple dimensions. Each dimension is classified independently using economic indicators, then a fusion layer detects agreement or divergence across dimensions. All models are walk-forward validated on decades of historical data — no look-ahead bias.
Where are we in the economic cycle right now?
The current regime is Expansion (growth), Neutral (market), Stable (inflation), and Neutral (financial conditions). Cross-dimensional agreement is 67%. See the full breakdown above.
How does the macro regime affect my portfolio?
Different regimes historically favor different asset allocations. Expansion regimes favor equities and cyclical assets. Late-cycle regimes favor defensive positioning and shorter-duration bonds. Contraction regimes favor treasuries, cash, and gold. MacroRadar's regime-optimized portfolio adjusts allocation based on the current classification.