This month's RQA Economic Insights examines the repricing of the Federal Reserve's path - where the market's expected rate trajectory has swung from pricing cuts at the start of the year to pricing hikes today, a roughly ninety-basis-point shift at the year-end horizon in barely five months. The move was driven by an energy shock that pushed headline inflation to 4.2% in May, but it lands on an already-firming base and arrives just as oil retreats toward pre-conflict levels - leaving open whether the hawkish turn is a necessary correction or a market getting ahead of itself. Our Economic Forecast Model eased modestly to 0.27 in May, holding comfortably above the zero-line threshold and continuing to signal expansion, while the heat map shows an economy still growing but with the pressure rotating from output to prices: manufacturing and services holding in expansion, labor cooling without breaking, and the inflation block turning decisively hot.

This month's RQA Economic Insights examines Real Personal Income excluding Transfer Receipts — the economy's organic income base — where year-over-year growth has decelerated from a 4.5% peak in May 2025 to 1.1% by the April 2026 release, compressing toward the zero bound. A slowing income rate doesn't signal contraction, but it raises the question of what is funding continued spending — savings, credit, or wealth gains — as growth drifts from income-led toward consumption-led. Notably, the drag is coming from labor and price channels rather than productivity, which has firmed. Our Economic Forecast Model climbed to 0.33 in April, holding well above the zero-line threshold, while the heat map shows steady, broad-based footing: manufacturing holding in expansion, services anchoring activity, and core PCE elevated above target.

This month's RQA Economic Insights examines the Manufacturing and Services PMI data - where both sectors are expanding simultaneously for the first time since mid-2022. Manufacturing PMI reached its strongest reading since August 2022 at 52.7, while services extended its expansion to a twenty-first consecutive month at 54.0, creating the "twin-engine" dynamic. Our Economic Forecast Model climbed to 0.26 in March, continuing its steady three-month advance and now sitting comfortably above the zero-line expansion threshold. Meanwhile, our heat map reveals a clear inflection in the economic narrative - manufacturing has definitively broken from its prolonged contraction cycle, labor markets delivered a robust jobs surprise, but inflation complications from geopolitical supply shocks are creating new constraints on the expansion.

This month's RQA Economic Insights examines cross-sectional dispersion within the S&P 500 — where a modest index-level decline masks one of the most dispersed constituent environments in recent history. Nearly three-quarters of the index has moved more than ±5% year-to-date, with a sector spread exceeding 40 percentage points, yet the headline return suggests nothing is happening. Our Economic Forecast Model has continued its gradual climb, registering its highest reading since mid-2025, while our heat map highlights an unusually mixed picture — manufacturing strength and improving sentiment on one side, a softening labor market and re-firming inflation on the other.

This month's RQA Economic Insights takes an updated look at the University of Michigan Consumer Sentiment Index, which has fallen sharply and now sits well below its long-term average — rivaling some of the most extreme pessimism in the index's history. Historically, sentiment troughs of this magnitude have preceded above-average forward returns in risk assets, though today's more diffuse drivers — including trade policy uncertainty and a growing wealth-based bifurcation in consumer confidence — call for patience. Our Economic Forecast Model has moved back into positive territory, while our heat map reflects a labor market that is decelerating but showing signs of stabilization — a key support for the current expansion.

This month's RQA Economic Insights examines the quiet re-acceleration in U.S. productivity data and its implications for growth, inflation, and corporate margins. After more than a decade of choppy performance, productivity now appears to be running above its longer-term trend—a shift we're framing as an early phase of the man and machine uplift. Our Economic Forecast Model remains modestly positive, while our heat map shows widening divergence between resilient services activity and manufacturing contraction, with labor markets decelerating without deteriorating.

This month’s RQA Economic Insights zeroes in on the real force behind today’s lofty market valuations: corporate profit margins. While traditional metrics like forward P/Es and the CAPE suggest U.S. equities are expensive, the sustained — and in some cases expanding — profitability of hyperscaler tech giants is reshaping what “expensive” means. We also update our Economic Forecast Model, which shows growth momentum hovering just above the zero line, signaling a fragile but positive near-term outlook amid a complex mix of steady consumer resilience, softer labor data, and shifting policy signals.

This month, we examine the recent uptick in high-yield credit spreads, signaling a cautious shift in market sentiment as economic uncertainties resurface. While investment-grade spreads remain stable, our analysis delves into what this divergence means for risk assessment and economic forecasting. We also update our Economic Forecast Model, highlighting signs of slowing growth momentum.

In our latest post, we dive into the mechanics behind the Santa Claus Rally and what drives year-end market trends. We also take a closer look at how the markets are reacting to the election, along with the latest economic data and insights from RQA’s forecast model to gauge where near-term growth is headed.

With the 2024 presidential election approaching and markets closely watching each development, our latest update dives into how election cycles historically impact equity markets and what current dynamics may mean for investors. We analyze pre- and post-election S&P 500 performance, examine volatility trends through the VIX, and consider the implications of rising interest rates and bond market volatility, as measured by the MOVE Index. RQA’s Economic Forecast Model is also showing signs of positive stabilization, but with the election adding uncertainty, volatility remains a key factor in the near-term outlook.