macro-regime-detector

Classify the current macroeconomic regime across six states using GDP, CPI, Fed Funds rate, yield curve, and credit spread data from the Finskills API.

Identify the current US macroeconomic regime by synthesizing real-time treasury yields, GDP growth, inflation, interest rates, and commodity price signals from the Finskills API. Output a regime classification with an evidence-based rationale and asset allocation implications.

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Setup

API Key required — Register at https://finskills.net to get your free key.
Header: X-API-Key: <your_api_key>

Get your API key: Register at https://finskills.net — free tier available, Pro plan unlocks real-time quotes, history, and financials.

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When to Activate This Skill

Activate when the user:

• Asks "what macro regime are we in?"
• Asks how the current macro environment affects their portfolio or sector
• Wants to understand Fed policy implications, yield curve shape, or inflation trend
• Asks for an asset allocation view based on macro conditions
• Mentions recession risk, stagflation, reflation, or rate cycle questions

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Macro Regime Framework

This skill classifies the US economy into one of six regimes:

Regime	GDP Growth	Inflation	Rate Direction	Risk Assets
Goldilocks	Expanding	Moderate (2–3%)	Stable/Falling	Risk-On ✅
Reflation	Expanding	Rising (3–5%)	Rising	Cyclicals ✅
Overheating	Strong	High (>5%)	Rising fast	Commodities ✅
Stagflation	Slowing	High (>4%)	Elevated	Hard Assets ✅
Slowdown	Decelerating	Falling	Stable	Defensives ✅
Recession	Contracting	Low/Deflating	Falling	Cash/Bonds ✅

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Data Retrieval — Finskills API Calls

Make the following calls (all free-tier endpoints):

1. US Treasury Rates (Yield Curve)

GET https://finskills.net/v1/free/macro/treasury-rates

Extract: 3m, 6m, 1y, 2y, 5y, 10y, 30y yields
Compute: 2y10y spread (primary inversion signal), 3m10y spread (recession predictor)

2. GDP Growth

GET https://finskills.net/v1/free/macro/gdp/US

Extract: latest GDP growth rate (QoQ annualized), trend direction (3-quarter comparison)

3. Inflation

GET https://finskills.net/v1/macro/inflation

Extract: CPI YoY, core CPI YoY, PCE YoY, trend (accelerating/stable/decelerating)

4. Interest Rates (Fed Policy)

GET https://finskills.net/v1/macro/interest-rates

Extract: Federal Funds Rate (current), last 6 rate decisions, trend (hiking/cutting/pausing)

5. Key Economic Indicators (FRED via free endpoint)

GET https://finskills.net/v1/free/macro/indicator/UNRATE

Extract: US unemployment rate (latest, 3-month trend)

GET https://finskills.net/v1/free/macro/indicator/INDPRO

Extract: Industrial Production Index (latest YoY%)

6. Commodity Price Signals

GET https://finskills.net/v1/free/commodity/prices

Extract: Gold (safe haven demand), WTI Crude (inflation/demand signal), Copper (growth proxy)

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Analysis Workflow

Step 1 — Yield Curve Classification

Using treasury rates data:

Signal	Threshold	Interpretation
2y10y spread	> +50 bps	Normal — growth expected
2y10y spread	-25 to +50 bps	Flat — transition phase
2y10y spread	< -25 bps	Inverted ⚠️ — recession risk elevated
3m10y spread	< 0 bps	Classic recession predictor (12–18 month lead)

Note the steepening/flattening trend direction (compare to 3 months ago if data allows).

Step 2 — Growth Assessment

GDP Signal	Label
> 3% annualized	Strong expansion
1–3% annualized	Moderate expansion
0–1% annualized	Stagnation
< 0% (1 quarter)	Contraction risk
< 0% (2 quarters)	Technical recession

Cross-check with: Industrial Production YoY, Unemployment trend.

Step 3 — Inflation Regime

CPI YoY	PCE YoY	Label
< 2%	< 2%	Deflationary/below-target
2–3%	2–2.5%	Target range (Goldilocks)
3–5%	2.5–4%	Above-target, manageable
> 5%	> 4%	High inflation

Classify trend: Rising / Stable / Falling (compare last 3 readings).

Step 4 — Fed Policy Stance

Rate Trend	Description
3+ consecutive hikes	Tightening cycle
Hold after hikes	Pause (peak rates)
First cut after hikes	Pivot (easing begins)
3+ consecutive cuts	Easing cycle
Hold at low rates	Accommodative

Step 5 — Commodity Cross-Check

• Gold rising + stocks flat or falling: Flight to safety, risk-off signal
• Oil rising + copper rising: Demand-driven inflation, growth-positive
• Oil rising + copper falling: Supply shock, stagflation signal
• Gold + bonds both rising: Deflation/recession fear

Step 6 — Regime Classification

Score each indicator and use this decision matrix:

IF GDP_expanding AND inflation_2-4% AND rates_stable: → GOLDILOCKS
IF GDP_expanding AND inflation_rising AND rates_rising: → REFLATION/OVERHEATING
IF GDP_slowing AND inflation_high AND rates_elevated: → STAGFLATION
IF GDP_slowing AND inflation_falling AND rates_cutting: → SLOWDOWN
IF GDP_contracting AND yield_curve_inverted: → RECESSION

Assign confidence: HIGH (3+ signals aligned), MEDIUM (2 signals), LOW (mixed signals).

Step 7 — Asset Allocation Implications

For each regime, output the relative preference for major asset classes:

Asset Class	Goldilocks	Reflation	Stagflation	Slowdown	Recession
US Equities	✅ OW	✅ OW	❌ UW	⚖️ N	❌ UW
Growth Tech	✅ OW	⚖️ N	❌ UW	⚖️ N	❌ UW
Energy/Materials	⚖️ N	✅ OW	✅ OW	❌ UW	❌ UW
Defensives	❌ UW	❌ UW	✅ OW	✅ OW	✅ OW
REITs	✅ OW	❌ UW	❌ UW	⚖️ N	❌ UW
Long Bonds	❌ UW	❌ UW	❌ UW	✅ OW	✅ OW
TIPS/I-Bonds	⚖️ N	✅ OW	✅ OW	❌ UW	❌ UW
Gold	❌ UW	⚖️ N	✅ OW	✅ OW	✅ OW
Cash	❌ UW	⚖️ N	✅ OW	✅ OW	✅ OW

OW = Overweight | N = Neutral | UW = Underweight

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Output Format

╔══════════════════════════════════════════════════╗
║       US MACRO REGIME REPORT  —  {DATE}         ║
╚══════════════════════════════════════════════════╝

🏛️ REGIME CLASSIFICATION: {REGIME NAME}
   Confidence: {HIGH / MEDIUM / LOW}
   Trend: {Deepening / Stable / Transitioning}

📊 MACRO DASHBOARD
  Treasury Yields:
    3M: {%}  |  2Y: {%}  |  5Y: {%}  |  10Y: {%}  |  30Y: {%}
    2Y–10Y Spread: {bps} ({normal/flat/inverted})
    3M–10Y Spread: {bps}

  Growth:
    GDP Growth:         {%} annualized ({direction})
    Industrial Prod:    {%} YoY
    Unemployment:       {%} ({trend})

  Inflation:
    CPI YoY:            {%}
    Core CPI YoY:       {%}
    PCE YoY:            {%}
    Trend:              {Rising / Stable / Falling}

  Fed Policy:
    Fed Funds Rate:     {%}
    Policy Stance:      {Tightening / Pause / Pivoting / Easing}
    Last Decision:      {hike/cut/hold} ({date})

  Commodity Signals:
    WTI Crude:  ${price} ({weekly change}%)
    Gold:       ${price} ({weekly change}%)
    Copper:     ${price} ({weekly change}%)
    Interpretation: {one-line signal}

🎯 ASSET ALLOCATION IMPLICATIONS
   Overweight:  {asset classes}
   Neutral:     {asset classes}
   Underweight: {asset classes}

📝 REGIME NARRATIVE
   {3–4 sentences describing the current macro environment, key risks,
    and what conditions would trigger a regime shift}

⚠️ WATCH — REGIME SHIFT TRIGGERS
   Bull shift if: {conditions}
   Bear shift if: {conditions}

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Limitations

• GDP data has a 30–60 day reporting lag (advance estimate vs. final).
• This is a macro framework for portfolio positioning, not a market timing tool.
• Commodity prices can be noisy on short timeframes; use weekly/monthly trends.