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Macro Econ 2026-03-22

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Economics Report

FED Data for Unemployment Rate:

The percentage of people in the labor force who are jobless and actively seeking work.

Latest Value: 4.4% on 2026-02-01

1 year data range: 4.1% to 4.5%

2 year data range: 3.9% to 4.5%

3 year data range: 3.4% to 4.5%

FED Data for All Employees, Total Nonfarm Payrolls:

The total number of paid workers in the U.S., excluding farm employees, government, and non-profits. A key measure of job growth.

Latest Value: 158.5M on 2026-02-01

1 year data range: 158.4M to 158.6M

2 year data range: 157.5M to 158.6M

3 year data range: 155.4M to 158.6M

FED Data for Advance Retail Sales:

A measure of the total sales at retail stores and food service establishments. A key indicator of consumer spending strength.

Latest Value: 733.5B on 2026-01-01

1 year data range: 716.1B to 734.7B

2 year data range: 687.6B to 734.7B

3 year data range: 670.5B to 734.7B

FED Data for Labor Force Participation Rate:

The percentage of the working-age population that is either employed or actively looking for work. It shows how many people are engaged in the labor market.

Latest Value: 62% on 2026-02-01

1 year data range: 62% to 62.6%

2 year data range: 62% to 62.7%

3 year data range: 62% to 62.8%

FED Data for Personal Savings Rate:

The percentage of disposable personal income that people save (i.e., don't spend).

Latest Value: 4.5% on 2026-01-01

1 year data range: 4% to 5.5%

2 year data range: 4% to 5.8%

3 year data range: 4% to 6.4%

FED Data for Consumer Price Index:

Measures the average change over time in the prices paid by urban consumers for a basket of goods and services. A primary gauge of inflation.

Latest Value: 327.5 on 2026-02-01

1 year data range: 320.3 to 327.5

2 year data range: 313 to 327.5

3 year data range: 302.8 to 327.5

FED Data for Core PCE Price Index:

The Federal Reserve's preferred inflation measure. It tracks price changes for consumer goods and services excluding the volatile food and energy categories.

Latest Value: 128.4 on 2026-01-01

1 year data range: 125.5 to 128.4

2 year data range: 122.3 to 128.4

3 year data range: 118.7 to 128.4

FED Data for Producer Price Index:

Measures the average change in selling prices received by domestic producers for their output. An indicator of inflation at the wholesale level.

Latest Value: 267.9 on 2026-02-01

1 year data range: 258.4 to 267.8

2 year data range: 252.7 to 267.8

3 year data range: 249.9 to 267.8

FED Data for Federal Funds Effective Rate:

The interest rate at which banks lend to each other overnight. It is the primary tool the Federal Reserve uses to conduct monetary policy.

Latest Value: 3.6% on 2026-02-01

1 year data range: 3.6% to 4.3%

2 year data range: 3.6% to 5.3%

3 year data range: 3.6% to 5.3%

FED Data for Fed's Assets:

The total size of the Federal Reserve's balance sheet. An increase indicates the Fed is adding liquidity to the financial system (e.g., via asset purchases/QE).

Latest Value: 6.7T on 2026-03-18

1 year data range: 6.5T to 6.7T

2 year data range: 6.5T to 7.5T

3 year data range: 6.5T to 8.7T

FED Data for 10-Year minus 2-Year Yield Spread:

The difference between 10-year and 2-year Treasury note yields. When it turns negative (inverts), it is a closely watched signal of a potential recession.

Latest Value: 0.5% on 2026-03-20

1 year data range: 0.3% to 0.7%

2 year data range: -0.5% to 0.7%

3 year data range: -1.1% to 0.7%

FED Data for 10-Year minus 3-Month Yield Spread:

The difference between 10-year and 3-month Treasury yields. Also a powerful recession indicator when it inverts.

Latest Value: 0.7% on 2026-03-20

1 year data range: -0.3% to 0.7%

2 year data range: -1.6% to 0.7%

3 year data range: -1.9% to 0.7%

US Dollar Index: 99.65, up 0.42% from a week ago.

Current VIX: 26.78, up 10.52% from a week ago.

Buffet Indicator as of 2025-10-01: 206.73%

SOFR minus IORB in the past 14 days (unit: basis points):

A positive spread (SOFR > IORB) indicates stress or scarcity of cash in the overnight lending market. A near-zero or negative spread (SOFR ≤ IORB) indicates ample liquidity.

DateValue
2026-03-19-3
2026-03-18-3
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2026-03-10-1
2026-03-090
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2026-03-026

Final Report

1. Holistic Macroeconomic Summary

The U.S. economy is displaying clear signs of a late-cycle slowdown transitioning toward a potential soft landing. The growth pulse is moderating: the labor market is cooling (unemployment has risen to 4.4%, payrolls have plateaued, and labor force participation sits at a multi-year low of 62%), while the consumer, though still spending (retail sales near all-time highs), is doing so with a diminished savings cushion (savings rate at 4.5%). Inflation remains persistent but is decelerating, with Core PCE still rising. The Federal Reserve has shifted to a more accommodative stance, having cut the policy rate to 3.6% and maintaining a steady, elevated balance sheet. This creates a "Fed put" environment aimed at managing the slowdown.

The market context is mixed. Valuation is a clear concern, with the Buffett Indicator signaling significant overvaluation at 206.73%. However, key recession signals have abated; the yield curve (10y-2y & 10y-3m) is now positively sloped, suggesting diminished near-term recession fears. Meanwhile, elevated market anxiety (VIX at 26.78) contrasts with ample systemic liquidity, as indicated by the SOFR-IORB spread hovering near or below zero.

2. Risk Assessment with Severity Ratings

  • Risk: Excessive Equity Market Valuation

    • Severity: High
    • Rationale: The Buffett Indicator at 206.73% is far above its historical norm, indicating the market is priced for perfection and vulnerable to earnings or multiple compression.

  • Risk: Consumer Resilience Erosion

    • Severity: Medium
    • Rationale: A low personal savings rate (4.5%) combined with a cooling labor market (rising unemployment) reduces the buffer for continued robust spending, posing a risk to corporate earnings.

  • Risk: Sticky Inflation Delaying Fed Cuts

    • Severity: Medium
    • Rationale: While decelerating, Core PCE (128.4) and CPI (327.5) remain at elevated levels, which could constrain the Fed's ability to provide further policy support if growth weakens more sharply.

  • Risk: Elevated Market Volatility

    • Severity: Medium
    • Rationale: The VIX above 26 reflects heightened investor uncertainty and anxiety, which can lead to sharp, disorderly price swings, particularly in an overvalued market.

3. Investor Implications

  • For Tactical Traders: Adopt a range-bound, volatility-aware strategy. The environment favors selective, short-term opportunities rather than persistent trends. High VIX levels support options strategies for hedging or generating income, but be mindful of headline-driven swings.
  • For Long-Term Investors: This is a time for prudent rebalancing and disciplined accumulation. Consider taking profits in overvalued segments of the portfolio to raise some cash for future opportunities. For ongoing contributions, stick to a dollar-cost averaging plan, but avoid making large, lump-sum equity investments at current elevated valuation levels.