US macro conditions show weakening employment, elevated yields (10Y at 4.69%), modest M2 expansion (5.5% YoY), and falling dollar strength, creating mixed signals for risk assets and highlighting fiscal-monetary tension.
Macro & Markets ·
US macroeconomic conditions are displaying internal inconsistency as employment weakens while liquidity expands, yields remain elevated at 4.69% for the 10-year Treasury, and the dollar index declines 1.7% year-over-year. M2 money supply reached $23.16 trillion in June with annual growth of 5.5%, while the effective federal funds rate stands at 3.63% as of early August. This combination of mixed signals—deteriorating labor market conditions alongside persistent yield levels and monetary expansion—creates tension between fiscal and monetary policy that may favor selective exposure to scarce monetary assets while raising questions about valuation sustainability in long-duration and highly leveraged sectors.