US Economic Regime Detector

Growth × inflation framework inspired by Ray Dalio's macro regime model. Classifies the current US environment from live FRED data and shows which asset classes historically perform best.

Current regimeLive

Detecting...

Analyzing GDP growth and CPI inflation trends from FRED data.

GDP growth -

CPI inflation -

Regime classification & what to hold

The four regimes are the combinations of the growth and inflation backdrop - e.g. "growth+ · inflation−" means growth running above trend while inflation falls. Winners are the assets that have historically outperformed in that regime; losers are the ones that tend to lag.

Goldilocksgrowth+ · inflation−

WinnersEquities, credit, growth stocks

LosersGold, commodities, cash

Reflationgrowth+ · inflation+

WinnersCommodities, value, TIPS, EM

LosersLong-duration bonds

Deflationgrowth− · inflation−

WinnersTreasuries, cash, quality bonds

LosersEquities, commodities, credit

Stagflationgrowth− · inflation+

WinnersGold, TIPS, commodities, cash

LosersEquities, long bonds, credit

+ scoring methodology

Regime history (1970–present)FRED

Goldilocks Reflation Deflation Stagflation

Regime rotation backtestLive

Regime rotation - applies the live detector. Rebalances quarterly using last quarter's regime call, mirroring what an investor could have actually done in real time.

Perfect foresight - cheats. Rebalances using next quarter's regime call as if you already knew it (impossible in practice - shown as the theoretical ceiling the detector could reach).

S&P 500 buy & hold - the passive benchmark. 100% S&P 500 through the full period, no decisions.

Asset mix per regime

Goldilocks

STOCKS 50%

BONDS 50%

Reflation

STOCKS 50%

COMMOD 50%

Deflation

BONDS 50%

CASH 50%

Stagflation

COMMOD 50%

CASH 50%

Growth vs inflation signalsFRED

Recession Dodge Strategy Alternative

An alternative detector that turns one forward-looking signal, the Chicago Fed's National Financial Conditions Index (NFCI), into a simple binary call: stay fully invested when financial conditions are loose, step aside to cash when they tighten. Conditions are loose about 71% of the time, so the strategy is usually invested and its whole edge comes from sitting out the few real credit-stress windows (2008, briefly 2020 and 2022) that tend to lead major drawdowns by a few weeks. Risk-on / risk-off, no four-quadrant rotation.

In the market

- OR -

Hold cash

Current Recession Dodge call

Detecting…

Reading the latest NFCI to decide: stay invested or hold cash.

+ scoring methodology

Series: NFCI · S&P 500 total return · 3-month T-bill (cash). Backtest window starts when NFCI begins (≈ 1971). Binary risk-on / risk-off: 100% S&P when NFCI ≤ 0, 100% cash when NFCI > 0, rebalanced quarterly on the prior quarter's reading.

About this tool

This tool classifies the current US economic regime with the framework popularized by Ray Dalio: growth rising or falling crossed with inflation rising or falling gives four regimes, and each has historically favored different assets. The classification runs on live economic data, not opinion.

The point is not prediction but preparation. Stocks carried the 2010s because the regime was disinflationary growth; commodities and TIPS carried 2021-22 when inflation took over. Knowing which regime you are in, and what tends to work in it, is a sturdier starting point than extrapolating whatever just worked.

Frequently asked questions

What are the four economic regimes?

Rising growth with falling inflation (the best for stocks), rising growth with rising inflation (commodities shine), falling growth with rising inflation (stagflation, the hardest regime), and falling growth with falling inflation (deflationary recession, where long Treasuries do their best work).

Which assets work in stagflation?

Historically commodities, gold and inflation-protected bonds. Both stocks and nominal bonds tend to struggle when growth slows while prices keep rising, which is what made the 1970s so painful for the classic portfolio.

How is the current regime detected?

From the direction of live growth and inflation data: the tool compares recent readings of activity and price series against their trend to decide whether each is accelerating or decelerating.