Regimes names the stage of the cycle each month has been in, from State of the Economy's three gauges, by rules written down before the engine was built. This page is those rules, in full, and the record of the one test that decided what the third gauge is allowed to do.
Everything here comes from two places and no third: the rules are transcribed from the ratified decision record (REGIME-DR-1 v3 (ratified 2026-09-19)), and every count is read from the engine's own route as this page renders. Nothing is typed in.
| law | what it binds |
|---|---|
| Fixed rules, set in advance | The rules below were written into the decision record and ratified before the engine was built. They are not fitted to the record they classify. |
| Every claim tested against the record | A claim reaches a surface only after it has been run over the whole record and its result recorded — including when the result is that the claim fails. |
| Counts, never probabilities | Every "what followed" on the Regimes page is a count of periods in this record. None of them is a forecast, and none is expressed as a likelihood. |
| Point-in-time honesty | The gauges are read as they stood at the time, from the vintage score table — not as later revisions made them look. |
| Independence | The regime reads the State of the Economy’s three gauges and nothing else. No feature depends on another: State of the Economy, the Capitulation Monitor, the Housing Cycle and Economic Breadth each stand on their own principles. A synthesis of what they mean together is a separate surface, written after the pillars exist. |
Three words, and they do not trade places.
| word | what it names |
|---|---|
| period | a run of months in one stage |
| episode | a run of the stress signal |
| stage | one of the four |
The feature is Regimes. The words spell, era and band do not name any of these.
Context per month, point-in-time: M, FS, IR (0–100; 50 the median; FS higher = healthier; IR lower = more strained); dM, dFS (3-month change); tr6 (IR’s 6-month change; positive = easing); side (+1 core PCE above 2%, −1 below); FS’s own 12-month high.
M is Momentum, FS is Forward Stress, IR is the Inflation Regime gauge — the three State of the Economy composites, read point-in-time.
Four ordered stages — Recovery · Expansion · Slowdown · Contraction — classified on Momentum. Forward Stress enters only in the frozen Contraction rule's compound branch. First match wins.
| # | stage | the rule, verbatim |
|---|---|---|
| 1 | Contraction | M < 30, or (M < 40 and dM ≤ −5 and FS < 40) — the frozen v5 form. |
| 2 | Recovery | entered after a Contraction period, with two months’ confirmation (the Contraction rule off and dM > 0, two months running); held while M < 60 and M ≥ (post-contraction trough + 5) and dM ≥ −3; exits to Expansion at M ≥ 60 or after 24 months; to Contraction by rule 1; to Slowdown if M falls back below trough + 5. A Contraction may exit directly to Expansion when M ≥ 60 on the exit month (2020’s V). |
| 3 | Slowdown | (M < 50 and dM ≤ 0) or M < 45. |
| 4 | Expansion | everything else with M ≥ 45. |
Read from the engine as this page loaded — the same rows the Regimes page's stage cards carry, over the record from Aug 1981.
| stage | periods | median length | became a Contraction within 18 months |
|---|---|---|---|
| Contraction | 7 | 4 months | — (it is the Contraction) |
| Recovery | 6 | 5 months | 2 of 6 |
| Slowdown | 10 | 3 months | 4 of 10 |
| Expansion | 10 | 32 months | 2 of 10 |
Counts of what followed in this record, never probabilities.
Persistence. M < 30 → Contraction immediately; the compound Contraction rule, or a Slowdown with dM ≤ −8 → 2 months’ confirmation; everything else → 3.
Exit thresholds. Slowdown leaves at M ≥ 55 or (M ≥ 50 and dM > 0 two months running); Contraction leaves only via Recovery, or straight to Expansion at M ≥ 60. Order: forward skips allowed; Contraction → Recovery (or Expansion at M ≥ 60) only. The latest months carry the standing stage with a forming note ("Slowdown forming, 2 of 3").
The direction words. cooling (dM ≤ −8 in 2 of the last 3 months) · firming (dM ≥ +8 in 2 of 3) · else none. Every direction word carries two-month persistence: a word changes only after two months of the new condition.
level = the Inflation Regime gauge’s own band word (house_ladder: calm · calm · neutral · strained · severely strained on the 80/60/40/20 edges; VOCAB-2’s shared top rung noted, not solved); direction = rising (tr6 ≤ −5) · stable · easing (tr6 ≥ 5).
The overlay never changes the stage; it is read beside it. The two band words at the top of that ladder are the site's own open vocabulary item, recorded and not yet resolved — the record names it rather than hiding it.
Banner form: “Expansion · inflation strained, stable”. The stage is named on Momentum; inflation is read beside it, never into it.
The stress signal opens when Forward Stress is ≥ 20 below its own 12-month high with M ≥ 50 for 2 consecutive months; it closes when Forward Stress is within 10 of its 12-month high for 2 months, or when the stage leaves Expansion.
| opened | closed | months | a Contraction followed within 18 months | S&P 500 TR, 12 months from the open |
|---|---|---|---|---|
| Sep 1984 | May 1985 | 9 | no | +15.7% |
| Feb 1989 | Jul 1989 | 6 | no | +16.1% |
| Sep 2000 | Jan 2001 | 5 | yes | -27.9% |
| Dec 2006 | Jun 2007 | 7 | yes | +6.3% |
| Feb 2019 | Oct 2019 | 9 | yes | +21.2% |
| Jun 2022 | May 2023 | 12 | no | +13.3% |
The fourth column tests the stage — whether a Contraction period began within eighteen months. The adjudication below tested something different: whether an NBER recession began. The two can disagree on one episode, and below they do.
Momentum names the stage. Forward Stress enters one branch of one rule and otherwise sits beside the stage as a signal. That is not an assumption; it is the result of a test that was written down in full — question, tiers, candidates and the bar — before it was run.
The question. Does Forward Stress carry information about coming deterioration that the four-stage growth classification does not already carry — and if so, which kind of deterioration, how far ahead, at what false-alarm cost?
| tier | the events |
|---|---|
| T1 economic | the 5 NBER recessions since 1981 (primary) |
| T2 economic deterioration without recession | Economic Breadth net < 0 for ≥ 3 consecutive months, on the revised record |
| T3 market | QUAD-1’s ≥ 20% drawdowns and, weaker, ≥ 10% corrections, from the S&P total-return chain, peak to trough |
| # | reading | the condition |
|---|---|---|
| 1 | level | FS < 40 while M ≥ 45 |
| 2 | direction | dFS ≤ −8 in 2 of 3 months while M ≥ 50 |
| 3 | drawdown from high | FS ≥ 20 below its own 12-month high while M ≥ 50 |
| 4 | stress-led Slowdown | M < 55 and FS < 40 joins Slowdown’s rule |
| 5 | stress-led Contraction | M < 45 and FS < 40 joins Contraction’s rule |
| 6 | tie-breaker | within 3 points of the 50 cut, FS ≥ 45 keeps Expansion, FS < 45 sends Slowdown |
The bar, applied per tier and stated as descriptive, not statistical: an episode-level hit on ≥ 4 of 5 T1 events with each lead listed; false alarms ≤ hits; AND the incremental test shows FS earlier than the growth stage by ≥ 2 months on at least 3 of 5. A candidate meeting the bar on T3 but not T1 is a market-stress signal, not an economic classifier, and is reported as such.
The run's own verdict: no candidate met the bar on T1 or T3. Read as a level (FS < 40 at any Momentum; the stress-led Slowdown and Contraction; the tie-breaker at the 50 cut) FS added nothing the growth stage did not carry — one hit in four recessions, ten months after the growth stage’s own warning, or no tallied episode at all. Read as a fall from its own recent level it did.
So FS stays out of the classification, and its direction is served beside the stage as a signal with its record.
The reading that did carry something is candidate 3 — the fall from Forward Stress's own twelve-month high — and it is the rule the stress signal is built on. Against the recessions it fired early three times:
| NBER recession | the growth stage's first warning | the signal fired | earlier by | lead to the recession |
|---|---|---|---|---|
| Aug 1990 | Jun 1989 | Feb 1989 | 4 months | 18 months |
| Jan 2008 | Jun 2007 | Dec 2006 | 6 months | 13 months |
| Mar 2020 | Mar 2020 | Feb 2019 | 13 months | 13 months |
Candidate 3 was tallied over five episodes: three hits, each earlier than the growth stage’s own first warning, and two false alarms in 45 years — 1984-09 and 2022-06. A sixth opening, 2000-09, was excluded by the pre-registered rule that an episode opening inside a drawdown already under way is not tallied. Three of five is not four of five, so the bar was not met.
The five rows above and in the tiers are quoted from the adjudication's own record (gate regime_1_fs_adjudication.md), which is where the run's month-by-month tables live. The episode table higher up is served live by the engine, which is why its fourth column and this one count different things.
The served timeline is point-in-time — the gauges as the vintage score table recorded them at the time. The revised record is computed by the same function from today’s data and differs from it in 62 of 541 months. Both are served, and each surface names which one it is reading.
The Regimes page reads the point-in-time record (this render: point-in-time). The what-changed table in State of the Economy's Time Machine reads the same engine on whichever basis that surface declares.