Welcome back to Macro Regime Watch, where we dive into our nowcasting models to analyze Growth, Inflation, and Liquidity trends.

Over recent months, we’ve dedicated substantial time to upgrading our models and refining the data we use. But the core question remains: how do we interpret the complexities of the macro environment, and how can these insights inform financial market strategies?

Historically, we viewed the macro landscape as one of eight distinct regimes, with markets operating firmly within one at any given time. Now, however, we’re recognizing a more nuanced “in-between phase,” where two or more regimes might flash equally before one becomes dominant. In simpler terms, these transition phases make navigation more challenging for investors compared to periods when a single regime clearly prevails.

To aid in this, we’ve designed a straightforward, holistic grid to help identify regimes. However, during times when multiple regimes overlap, this tool may be less informative.

Chart 1.a: Regimes grid