Macro desk · Morning edition · Tuesday, August 25, 2026
The US economy remains a late-cycle expansion with the Fed on hold, not easing — steady policy meeting sticky inflation and a labor market cooling gradually rather than cracking. Core CPI at 2.5% and headline at 3.3% keep the Fed anchored at a 3.63% funds rate even as unemployment ticks down to 4.1%. Financial conditions stay historically loose and credit keeps expanding, but the 10y-2y curve steepening to 0.46pp confirms the late-cycle signal is still building.
Prices in this edition were taken live, not from stored closes. They were read at the Morning edition slot on Tuesday, August 25, 2026. Anything named as a cause may come from a headline the desk was given.
- Bank credit up $122.9B in a month and C&I loans up $39.7B over 13 weeks show lending still expanding, not contracting.
- Business inventory/sales ratio rising to 1.30 alongside a slowing 4.1% jobless rate points to demand cooling faster than supply.
- Sticky core CPI at 2.5% with unemployment still low gives the Fed no urgency to cut ahead of the September 4 jobs report.
- The 10-year yield fell to 4.66% even as the 10y-2y curve steepened to 0.46pp, a classic late-cycle re-steepening pattern.
- The has slid from 100.80 in late July to 98.96, breaking below 99 for the first time this cycle.
- at 15.79, down 15% over the month, shows no rate-market stress despite the dollar's slide and yield curve shift.
- With CPI 17 days out and payrolls 10 days out, rate-vol should build into early September even with the tape this calm.
- Fear & Greed at 56 (greed) is up sharply from 41 a month ago, a genuine sentiment extreme relative to recent history.
- Financial conditions loosened further to -0.559, but the Financial Stress Index actually ticked up +0.054 over the month — a subtle divergence.
- Calm-on-the-surface, loosening-underneath conditions are consistent with a late-cycle backdrop, not an all-clear signal.
- Loose financial conditions, expanding bank credit and rising greed sentiment argue for a still-permissive backdrop for risk-taking.
- A steepening curve after a long flattening/inversion phase is historically the part of the cycle that coincides with eventual downturns, not the inversion itself.
- Stretched valuations flagged in today's commentary layer extra fragility onto an otherwise still-expansionary credit and labor backdrop.
The dollar index broke below 99 in late August, a fresh low versus the July range shown here — the driver behind today's gold and bitcoin strength.
The numbers behind it
Macro heat map
Rates, USD, Commodities and Inflation are never green and never red: each is favourable for one part of the economy and costly to another, so those cells show only whether the move was material.
Every move here is measured between two stored daily closes, so the reading belongs to a session rather than to a time of day. This block is cut at the 2026-08-25 session. Anything named as a driver comes from a stored series and never from a headline.
- S&P 5007,677.28+0.32%2026-08-25
- 10Y Yield4.64%-1.38%2026-08-25
- CPI Inflation3.4%+0.0flat against 2%2026-08-01
- Core CPI2.4%-0.0flat against 2%2026-08-01
- Unemployment Rate4.1%+0.02026-08-01
- Fed Funds Rate3.63%+0.002026-08-25
- 2s10s Spread0.47pp+0.01normal2026-08-25
- VIX15.45-2.52%2026-08-25
- Dollar Index98.92-0.08%2026-08-25
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The desk voices are written by AI, not by human reporters. Every figure is taken from the listed market, sensor and headline data, and an automated check flags any figure or quoted source that is not.