ECO I monitors the U.S. economy and financial markets for warning signs of a downturn or crash.
RISK STAGE2/ 7Stretched credit
Prices or credit leave little room for error; nothing is breaking.
Stocks pricier than 90% of history · Lenders asking unusually little for risk
Since 05 Nov 2026: stage 3 → 2 · Bond yields jumping off
1Calm
2Stretched
3Watch
4Early warning
5Cracking
6Breaking
7Crisis
Stage each month since 1990, replayed with revised data. Gray: recessions.
MARKET STRESSNormal since 21 Oct 2025
OFR data through 04 Nov · Treasury data through 05 Nov
Describes observed strain. Not a forecast of a fall.
Second opinion risk 5.5 / 10
Not yet in official data: Local votes and possible state pauses threaten about half of planned data centers, a coming cut to construction jobs that payrolls do not yet show. Doubt over a giant start-up stock offering and supplier-funded AI sales point to tighter tech funding that broad credit spreads miss.
Commentary vs data: Talk that slower building helps large technology firms ignores that chip and software shares led the fall and the fear gauge jumped 69%.
Bottom line: Stay with wages and daily sales and avoid builders who borrow before customers pay until price data and claims confirm the pause is contained.
Stocks 100th percentile · Extra interest -0.27 pts · 10-year rate +0.69 pts in 6 months
Stocks are pricier than in 90% of the past and lenders charge companies no more than usual for risk, yet the 10-year rate rose 0.69 points in six months.
Spending vs. paychecks
Spending +2.5% · Pay after inflation +0.5% (12 months)
After inflation, spending grew 2.0 points faster than pay over 12 months; households are covering the gap from savings or credit.
Long yields vs. short rates
10-year rate +0.69 pts in 6 months · 10-year minus 3-month +0.81 pts
Long-term yields are stable and the yield curve slopes normally.
Layoffs vs. hiring
Jobless claims +0% vs. one-year low · Jobs +137k a month
Layoffs and hiring both look steady.
Full assessment and supporting reasoningWhat limits this conclusion
The exact Sahm-style recession check is unavailable because its full monthly lookback is not valid. Missing CPS months are not skipped or filled.
Valuation vulnerability is high, while financial stress is subdued and payrolls are growing
Why caution is warranted
The Board's nonfinancial corporate equity-to-net-worth measure is at the 99.7th percentile of its retained history since 1980. High historical valuation is vulnerability, not proof of a bubble or its timing.
What points the other way
OFR's global financial stress index is not above its historical average; it does not currently confirm an acute market-stress episode.
Neither business-size category reports significant net tightening in the latest SLOOS. This describes changes in standards, not their absolute tightness.
Nonfarm payrolls increased by 411 thousand jobs over three months.
Method, scope and reproducibility
This is an explicit ECO I interpretation policy, not a statistically calibrated crash or recession forecast.
Source: U.S. Bureau of Labor Statistics. BLS.gov cannot vouch for the data or analyses derived from these data after the data have been retrieved from BLS.gov. Data access dates are supplied as retrieved_at in canonical observations. Latest retained BLS access: 07 Nov 2026 · 01:37 UTC. BLS source terms
Source: BIS debt service, credit and credit-gap statistics; debt service is model-based. ECO I's calculations and interpretation are its own; BIS does not endorse them. BIS statistical-use terms