Executive Summary
Element | Assessment |
Regime | Neutral/Chop (aggregate score +1, minimal conviction) |
Pillar Structure | Four of five pillars at zero; only Risk Appetite positive |
Signpost Shift | Recession warnings cleared (LEI, curve, RRP) → Currency warnings triggered (USD/JPY, DXY, Gold) |
Base Case | 55% probability of staying current through Q1 |
Key Dates | Jan 9 NFP, Jan 13 CPI, Jan 22-23 BoJ, Mar 17-18 FOMC |
Positioning | Stay invested, quality over beta, size for the 45% chance the base case breaks |
Primary Risks | Carry unwind, tariff pass-through, labor market deterioration |
The Regime Transition
Six weeks ago, MacroAnalytix launched with a dashboard flashing Reflation. Four weeks later, we were staring at Stagflation - four signposts triggered simultaneously, the worst regime in the framework. Two weeks after that, we’re somewhere entirely different: the center of the matrix, directionless, with minimal conviction and a completely different set of warning signals.
The journey from The Setup Issue #001 to Issue #005 tells the story of why regime-based thinking matters. If you traded the Stagflation headlines, you got whipsawed. If you followed the dashboard’s systematic approach, you navigated the volatility without major damage.
This issue maps where we are now, why we got here, and most importantly, what Q1 2026 is likely to bring. Not predictions with false precision, but probability-weighted scenarios built from the same framework that caught the regime transitions in real time.
Where We Stand: The Current Regime
The dashboard reads directionless with an aggregate score of +1, minimal conviction. Four of five pillars score at zero. Only Risk Appetite is positive, and it’s carrying the entire regime read. That’s a fragile structure.
Pillar | Score | Trend | Change | Signal |
Growth | 0 | ↑ | ↑ from -1 | Neutral (stabilized) |
Inflation | 0 | ↓ | ↓ from +1 | Stable (pipeline clearing) |
Policy | 0 | ↓ | ↓ from +1 | Neutral (both loose) |
Liquidity | 0 | ↓ | ↑ from -1 | Neutral (plumbing fixed) |
Risk Appetite | +1 | ↑ | → | Risk-On (accelerating) |
Current Regime: Neutral/Chop | Aggregate Score: +1 | Conviction: Minimal
The “Minimal” conviction flag isn’t uncertainty about the data, it’s a statement that the data itself is directionless. Growth has stabilized but isn’t accelerating. Inflation is clearing the pipeline but hasn’t reached target. Policy is loose but not easing further. Liquidity is normalized but not supportive. When every pillar sits at zero, the regime matrix places you in the center: no clear winning theme, no clear losing theme.
That sounds like good news after the Stagflation scare. It isn’t necessarily. This regime is an unstable equilibrium. Small changes in any pillar can tip the balance in either direction. The 55% probability of staying current means 45% odds we don’t. And those odds aren’t symmetric.