Quontis Global Regime The global economic regime, free and public
Illustrative example: the real indicator will be published at launch.
The global economy is in a phase of Expansion.
Strong growth and contained inflation.
It describes the present: it doesn’t predict, doesn’t give signals and doesn’t tell you what to do.
- Strength
- On watch
- A pillar is starting to turn, but the turn isn’t confirmed.
- In this regime since
- (example date)
- Last review
- (example date)
The four pillars
- Growth starting to turn
- Strong
- Inflation starting to turn
- Contained
- Monetary policy and liquidity starting to turn
- Neutral
- Risk appetite starting to turn
- High
The last few years
In the example, the periods are made up and undated. The length of each segment shows how long it lasted.
- Overheating Period 1
- Slowdown Period 2
- Transition Period 3
- Expansion Period 4 Current
General information, not investment advice.
It’s reviewed once a week. A change of regime is only accepted once it’s confirmed in consecutive reviews.
Five regimes. No more.
The first four are defined by how growth and inflation are doing. The fifth, Transition, only appears when several pillars turn at once and no regime is confirmed.
The map’s relief is a drawing, not data. Only the current regime lights up.
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Expansion
Strong or moderate growth, contained inflation.
The economy grows without prices accelerating.
In the example above
-
Overheating
Strong or moderate growth, rising inflation.
The economy keeps growing, but prices start to accelerate.
In the example above
-
Stagflation
Weak or moderate growth, high inflation.
The economy loses momentum while prices stay high.
In the example above
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Slowdown
Weak growth, falling inflation.
The economy cools and prices ease.
In the example above
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Transition
Only when several pillars turn at once and no regime is confirmed.
The economy leaves one regime without having entered another yet.
In the example above
Four pillars and strength.
Each pillar is summed up in one word. Strength tells you whether the regime is settled or whether something is starting to move.
- Growth
- How economic activity is doing. It can be Weak, Moderate or Strong.
- Inflation
- How prices are doing. It can be Easing, Contained, Accelerating or High.
- Monetary policy and liquidity
- What central banks are doing with interest rates, and how much money is circulating. It can be Expansionary, Neutral or Restrictive.
- Risk appetite
- How much risk investors are willing to take on. It can be Low, Moderate or High.
Above, each pillar’s current word is highlighted, in amber if that pillar is starting to turn.
Strength
- Established
- No pillar is turning.
- On watch
- A pillar is starting to turn, but the turn isn’t confirmed. In the row of pillars, “starting to turn” shows which one.
How the major assets tend to behave in each regime.
These are general tendencies, not a rule or a forecast: every cycle is different and no asset always behaves the same way.
| Regime | Equities | Bonds | Commodities | Gold |
|---|---|---|---|---|
| Expansion | They tend to have a tailwind. | Calmer; they can lag behind. | They tend to be supported by steady demand. | Less sought after as a safe haven. |
| Overheating | Some companies rise and others don’t: rising interest rates weigh. | They tend to suffer from inflation and interest rates. | They tend to do better: demand is strong. | It can attract those protecting themselves against inflation. |
| Stagflation | A difficult environment. | They can suffer too: inflation stays high. | Mixed: supply is the main driver. | It tends to hold up better than most. |
| Slowdown | Companies that depend least on the economy, such as those in food or healthcare, tend to hold up better: slower growth weighs. | They tend to do better if rates fall. | They weaken along with demand. | It tends to be sought after as a safe haven again. |
| Transition | No clear pattern: there’s usually more volatility, and the leading assets change more often. | |||
Why it doesn’t move with every headline.
It only moves with what really matters. A macro data release, a news story or a bad day in the markets doesn’t change it. If it changes, it’s because the global regime has really changed.
Like the seasons: one rainy day doesn’t end the summer.
News, data and markets: they move every day
The regime: it rarely changes
It’s reviewed once a week. A change of regime is only accepted once it’s confirmed in consecutive reviews.
How the regime changes
Every week
The four pillars are reviewed.
If a pillar starts to turn
Strength moves to “On watch”: the regime stays the same.
If the turn is confirmed
After consecutive reviews, the regime changes. If several pillars turn at once and no regime is confirmed, it moves to Transition.
General information, not investment advice.
Quontis Global Regime describes the global economic environment, the same for everyone. It’s general information: it isn’t investment advice or an investment recommendation, it doesn’t take your situation into account and it doesn’t tell you what to do with your money. It doesn’t predict or give signals.
What you see on this page today is an illustrative example: the real indicator will be published at launch.
Free, for everyone
Where we are, what’s coming and how to read it.
Quontis Global Regime, the Calendar and Learn, no subscription needed. For each session, Djinnex Desk.