Visualizing the Investment Clock with GDP Growth and CPI Inflation

Summary

This indicator plots a historical trail of year-over-year GDP growth and CPI inflation against user-defined sustainable benchmarks. It maps inflation relative to its threshold horizontally and growth relative to its threshold vertically, then labels the four combinations as recovery, overheating, stagflation, and reflation. The displayed defaults are 2.5% sustainable growth and 3% sustainable inflation, with a trail length of 24 points.

Each regime includes illustrative sector and asset-allocation ideas, such as favoring commodities in overheating or bonds in reflation, along with possible transitions to other regimes. These are framework-based suggestions embedded in the chart, not a tested allocation strategy or evidence of returns. The visualization depends on the selected economic data symbols, benchmark levels, and update frequency; its code requests GDP and core CPI series and calculates changes over 12 observations. Users should interpret the quadrants as a simplified macroeconomic lens, since growth and inflation data can be revised and markets may respond to factors the graph does not represent.

Key ideas

• The graph positions historical GDP growth and CPI inflation relative to configurable sustainable-rate thresholds.
• It labels the four growth-inflation combinations as recovery, overheating, stagflation, and reflation.
• The plotted trail connects recent observations so users can see how the measured regime has changed over time.
• Sector and asset suggestions are illustrative framework guidance, not performance-tested trading rules.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.