Before debating empirical thresholds or the current regime, the NFCI must be defined precisely and its construction mechanics laid bare. Three methodological properties structure any rigorous reading of the index. TL;DR Each weekly NFCI value comes from a single-factor model…
Every Friday the Chicago Fed publishes the NFCI, a weekly index aggregating 105 financial variables since 1971. Reading it by standard deviation rather than by binary threshold reveals where the current regime sits within 55 years of U.S. macro-financial history.…
De-dollarization is among the most discussed macro theses since 2022. The measured flows — IMF COFER, SWIFT, BIS statistics — tell a more contained story than the geopolitical narrative. DTWEXBGS itself has not declined. TL;DR The yuan's share of global…
September 2024, the Fed launched its cutting cycle: -100 cumulative basis points by May 18, 2026. Classical theory predicted a broad-dollar depreciation of -3 to -5%. Observed: -1.2%. Three competing hypotheses feed the analysis. TL;DR DTWEXBGS slipped just 1.2% across…
DTWEXBGS, by incorporating yuan, peso, won, real, and rupee at 37% of the basket, directly captures dollar pressure on emerging economies. Three transmission channels, eight documented crises since 1980, and an open question on the current cycle. TL;DR At 37%…
DTWEXBGS, reconstructed through pre-2019 Fed series, has cycled through seven distinct phases since 1973. Volcker, Plaza Accord, Clinton, GFC, Powell 2022: the temporal taxonomy structures any comparative reading. TL;DR The reconstructed broad dollar's upswings ran seven to eleven years and…
The DXY covers six developed-market currencies with weights frozen since 1973, 57.6% of which is the euro. DTWEXBGS covers 26 trade-partner currencies with annual rebalancing, including 14.8% in yuan. The two indices answer different questions. TL;DR In 2022 one dollar…
DTWEXBGS aggregates the dollar against 26 partner currencies weighted by bilateral trade flows and refreshed annually. The formula is written as weighted geometric averages, but it reads through trade flows. TL;DR The January 2019 revision folded three legacy Fed dollar…
DTWEXBGS, the Federal Reserve’s broad dollar index, measures the dollar against 26 partner currencies weighted by bilateral trade flows. Its analytical reach differs structurally from the better-known DXY — a six-currency basket dominated by the euro and frozen in composition…
When the 10-year Treasury term premium is positive and durable, the asset-price architecture reconfigures: mechanical curve steepening, Equity Risk Premium recomposition, multiple compression for long-duration equity indices, and international transmission through portfolio flows. TL;DR A durable positive term premium steepens…
