Model A

Author

Aaron Soderstrom

Figure 1: MAB
Figure 2: MAB Short-Term

Anticipatory Economic Indicators

Fed Funds Rate

Figure 3: Fed Funds Rate
Figure 4: Fed Funds Rate Leads LEIs
Recent Changes To Fed Funds Rate
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
Dollar 4.33 4.33 4.33 4.33 4.58 4.83 4.83 5.33 5.33 5.33 5.33 5.33
Δ in Dollar 0 0 0 -0.25 0 0 -0.5 0 0 0 0 0
Table 1: This table shows the recent movement in the federal funds rate.

Two Year Treasuries

Figure 5: 2Yr Treasuries lead the S&P 500 Index
Figure 6: 2Yr Treasuries Leads LEIs
Recent Changes To 2 Yr Treasires
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
2Yr Treasuriesr 3.89 3.99 4.22 4.25 4.13 4.16 3.66 3.91 4.29 4.71 4.89 5.04
Δ in 2Yr Treasuriesr -0.18 -0.2 -0.02 0.06 0.01 0.5 -0.17 -0.38 -0.42 -0.23 -0.15 0.45
Table 2: This table shows the recent movement in the 2Y Treasuries.

Ten Year Treasuries

Figure 7: 10Yr Treasuries lead the S&P 500 Index
Figure 8: 10Yr Treasuries Leads LEIs
Recent Changes To Ten Year Treasires
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
10Yr Treasuriesr 4.23 4.24 4.58 4.58 4.18 4.28 3.81 3.91 4.09 4.36 4.51 4.69
Δ in 10Yr Treasuriesr -0.06 -0.31 0.03 0.33 -0.1 0.47 -0.03 -0.18 -0.27 -0.18 -0.18 0.49
Table 3: This table shows the recent movement in the 10Y Treasuries.

5Yr. Real Rates

Figure 9: 5Yr. real rates tends to lead the S&P 500 Index
Figure 10: 5yr real rates tends to lead LEIs
Recent Changes To Inflation-indexed 5-Year Treasury
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
Real Rates 5-Year Treasury 1.35 1.45 1.82 2 1.72 1.77 1.51 1.7 1.84 2.09 2.18 2.29
Δ in Real Rates 5-Year Treasury -0.17 -0.36 -0.2 0.21 -0.08 0.26 -0.13 -0.14 -0.25 -0.14 -0.11 0.46
Table 4: This table shows the recent movement in the 5Y real rates.

10Yr. Real Rates

Figure 11: 10Yr. real rates tends to lead the S&P 500 Index
Figure 12: 10yr real rates tends to lead LEIs
Recent Changes To Inflation-indexed 10-Year Treasury
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
Real Rates 10-Year Treasury 1.85 1.86 2.16 2.24 1.92 1.95 1.63 1.76 1.85 2.08 2.16 2.28
Δ in Real Rates 10-Year Treasury -0.07 -0.27 -0.08 0.25 -0.07 0.32 -0.06 -0.09 -0.23 -0.12 -0.12 0.4
Table 5: This table shows the recent movement in the 10Y real rates.

10Yr less 2Yr Treasury Spread

Figure 13: 10Yr less 2Yr Treasury Spread tends to lead the S&P 500 Index
Figure 14: 10Yr less 2Yr Treasury Spread tends to lead LEIs
Recent Changes To 10Yr less 2Yr Treasury Spread
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
10Yr less 2Yr Treasury Spread 0.34 0.25 0.36 0.33 0.05 0.12 0.15 0 -0.2 -0.35 -0.38 -0.35
Δ in 10Yr less 2Yr Treasury Spread 0.12 -0.11 0.05 0.27 -0.11 -0.03 0.14 0.2 0.15 0.05 -0.03 0.04
Table 6: This table shows the recent movement in the 10Yr less 2Yr Treasury Spread.

Money Supply (M2)

Figure 15: Money Supply (M2) Leads LEIs
Figure 16: Money Supply (M2) Leads LEIs
Recent Changes To Money Supply (M2)
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
M2 -- 21671 21577 21490 21454 21336 21272 21186 21098 21066 20997 20933
Δ in M2 -- 94 87 36 118 64 86 88 32 69 64 31
Table 7: This table shows the recent movement in M2.

Real Money Supply (M2)

Figure 17: Real Money Supply (M2) Leads LEIs
Figure 18: Real Money Supply (M2) Leads LEIs
Recent Changes To Real Money Supply (M2)
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
Real M2 -- 6777 6762 6766 6780 6761 6756 6744 6728 6727 6705 6688
Δ in Real M2 -- 15 -4 -14 19 5 12 16 1 22 17 -9
Table 8: This table shows the recent movement in Real M2.

True Money Supply (TMS-2)

TMS-2 is a measure of the money supply that includes all cash, checking accounts, and savings accounts. It is a broader measure of the money supply than M2. TMS stands for “True Money Supply.”

Figure 19: True Money Supoply (TMS) leads the stock market.
Figure 20: The True Money Supoply (TMS) Leads LEIs
Recent Changes To True Money Supoply (TMS) 2
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
TMS 2 -- 358930 359780 363620 366960 366450 367720 367380 368610 370460 371640 372630
Δ in TMS 2 -- -850 -3840 -3340 510 -1270 340 -1230 -1850 -1180 -990 -1030
Table 9: This table shows the recent movement in the True Money Supoply (TMS).

Taylor Rule

The Taylor Rule approximates the Fed’s policy reaction function. While the Taylor Rule has lost credibility in the financial industry, it remains a helpful tool for forecasting LEIs.

Figure 21: The Taylor Rule leads the stock market.
Figure 22: The Taylor Rule Leads LEIs
Recent Changes To Taylor Rule
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
Taylor Rule 5.6 5.6 5.6 5.6 5.6 5.6 5.29 5.29 5.29 5.68 5.68 5.68
Δ in Taylor Rule 0 0 0 0 0 0.31 0 0 -0.4 0 0 0.34
Table 10: This table shows the recent movement in the Taylor Rule.

Headline Inflation

Figure 23: Consumer Price Index (CPI) leads the stock market.
Figure 24: Consumer Price Index (CPI) Leads LEIs
Recent Changes To Consumer Price Index (CPI)
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
Headline CPI 2.41 2.81 3 2.87 2.71 2.57 2.43 2.61 2.94 2.97 3.24 3.35
Δ in Headline CPI -0.41 -0.19 0.13 0.16 0.14 0.14 -0.18 -0.33 -0.03 -0.27 -0.12 -0.11
Table 11: This table shows the recent movement in Consumer Price Index (CPI).

Core Inflation

Figure 25: Personal Consumption Expenditures (PCE) leads the stock market.
Figure 26: Personal Consumption Expenditures (PCE) Leads LEIs
Recent Changes To Personal Consumption Expenditures (PCE) Excluding Food and Energy
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
Core PCE -- 2.79 2.66 2.86 2.83 2.82 2.66 2.73 2.67 2.63 2.67 2.89
Δ in Core PCE -- 0.13 -0.2 0.03 0.01 0.16 -0.07 0.07 0.03 -0.04 -0.22 -0.09
Table 12: This table shows the recent movement in Wage Inflation.

Producer Price Index (PPI)

Figure 27: Producer Price Index (PPI) leads the stock market.
Figure 28: Producer Price Index (PPI) Leads LEIs
Recent Changes To Producer Price Index (PPI)
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
Producer Price Index (PPI) 1.47 1.91 2.42 1.43 0.14 -0.83 -2.41 -0.86 1.37 0.81 0.65 0.03
Δ in Producer Price Index (PPI) -0.45 -0.51 0.99 1.29 0.97 1.59 -1.55 -2.23 0.56 0.16 0.62 0.79
Table 13: This table shows the recent movement in Wage Inflation.

ISM Prices Paid

The ISM Prices Paid Index is a measure of the prices paid by manufacturers for raw materials and components. It is a leading indicator of inflation.

Figure 29: ISM Manufacturing Prices Paid
Figure 30: ISM Prices Paid
Recent Changes To United States ISM Manufacturing Prices Paid
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
ISM Prices Paid 69.4 62.4 54.9 52.5 50.3 54.8 48.3 54 52.9 52.1 57 60.9
Δ in ISM Prices Paid 7 7.5 2.4 2.2 -4.5 6.5 -5.7 1.1 0.8 -4.9 -3.9 5.1
Table 14: This table shows the recent movement in the prices paid ISM.

U.S. Dollar Index

Figure 31: US Dollar Index
Recent Changes To U.S. Dollar Index
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
Dollar 127.94 128.24 127.62 125.73 123.97 123.01 122.98 123.47 123.29 122.81 121.94 121.64
Δ in Dollar -0.28 0.78 2.01 1.84 1.01 0.03 -0.47 0.18 0.48 0.92 0.3 0.76
Table 15: This table shows the recent movement in the U.S. Dollar.

Oil (WTI Crude Oil)

Figure 32: Oil (WTI Crude Oil)
Recent Changes To Crude Oil Prices: West Texas Intermediate (WTI) - Cushing, Oklahoma
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
WTI Crude Oil 71.72 72.19 71.71 70.63 71.2 73.2 76.62 79.38 80.74 81.85 82.16 81.19
Δ in WTI Crude Oil -0.46 0.53 1.09 -0.69 -2.44 -3.43 -2.88 -1.36 -1.11 -0.29 0.97 3.99
Table 16: This table shows the recent movement in WTI Crude Oil.

Gasoline Prices

Figure 33: Gasoline Prices
Recent Changes To Conventional Gasoline Prices: U.S. Gulf Coast, Regular
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
Gasoline Prices 2.06 2.02 1.98 1.97 2 2.11 2.23 2.32 2.36 2.43 2.5 2.48
Δ in Gasoline Prices 0.04 0.04 0.01 -0.04 -0.13 -0.12 -0.09 -0.04 -0.07 -0.08 0.03 0.16
Table 17: This table shows the recent movement in Gasoline.

Capacity Utilization

Figure 34: Capacity Utilization
Figure 35: Capacity Utilization Leads LEIs
Recent Changes To Capacity Utilization
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
Capacity Utilization -- 76.92 76.33 76.39 76.09 76.06 76.57 76.91 76.56 77.14 77.27 76.84
Δ in Capacity Utilization -- 0.59 -0.06 0.3 0.03 -0.51 -0.34 0.34 -0.58 -0.13 0.43 -0.62
Table 18: This table shows the recent movement in Wage Inflation.

Wage Inflation

Figure 36: Wage Inflation Leads LEIs
Figure 37: Wage Inflation Leads LEIs
Recent Changes To Wage inflation
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
Wage Inflation 1.89 2.18 2.02 2.04 2.09 2.17 1.7 1.68 1.47 1.13 1.18 1.09
Δ in Wage Inflation -0.29 0.16 -0.02 -0.05 -0.08 0.47 0.02 0.2 0.34 -0.05 0.09 0.15
Table 19: This table shows the recent movement in Wage Inflation.

Jobs Hard To Fill

The importance of employment in the Fed’s monetary policy function has resulted in a number of AEIs from unlikely sources. The NFIB Job Openings data is one of these. It has been a consistent indicator of future trends in the ISM for roughly 35 years.

Figure 38: NFIB Jobs Hard To Fill
Figure 39: Wage Inflation Leads LEIs
Recent Changes To NFIB Jobs Hard To Fill
Apr-25 Mar-25 Feb-25 Jan-25 Dec-24 Nov-24 Oct-24 Sep-24 Aug-24 Jul-24 Jun-24 May-24
Jobs Hard To Fill 36.5 35 34.09 35.18 36.06 36.92 38.44 40.59 38.77 38.64 40.38 38.26
Δ in Jobs Hard To Fill 1.5 0.9 -1.09 -0.88 -0.86 -1.52 -2.14 1.81 0.13 -1.74 2.12 1.94
Table 20: This table shows the recent movement in Wage Inflation.