{
  "id": 4693036,
  "title": "Seven Graphs for the Financial System",
  "url": "https://urgent.news/2026/08/31/seven-graphs-for-the-financial-system",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-31T17:26:50.000Z",
  "source": {
    "name": "Econbrowser",
    "slug": "econbrowser",
    "url": "https://econbrowser.com/archives/2026/08/seven-graphs-for-the-financial-system"
  },
  "original_language": "en",
  "account": "Figure 1 illustrates the Federal debt held by the public as a percentage of GDP. The blue line represents the actual ratio, while the plus sign indicates the CBO's February projection. The right scale shows real ten-year interest rates, also denoted by the red line.\n\nFigure 2 displays the relationship between the CPI-deflated S&P 500 index (left scale) and the CAPE ratio (right scale), both plotted on a logarithmic scale. Shiller data is used for this analysis.\n\nFigure 3 presents the S&P 500 capitalization (blue bars) and the share of the market accounted for by the Magnificent 7 (red bars). This figure highlights the dominance of a select few large-cap stocks in the overall market.\n\nFigure 4 compares the Fed funds rate (actual rate, black line) against the Taylor rule-implied target rate (red line). The Taylor rule is a guideline for setting interest rates based on inflation and the output gap.\n\nFigure 5 shows the Fed's credibility measure (blue line), calculated by Bordo and Siklos, with values ranging from -1 to +1. Higher values indicate lower credibility, as measured by the deviation of the actual inflation rate from the target rate.\n\nFigure 6 explores the emergence of stablecoins in the financial system. Liang and Nieman's research, \"Stablecoins after GENIUS\" (2026), is referenced to discuss the recent development of these digital assets, which have gained prominence after the GENIUS experiment.",
  "summary": "Apropos of nothing except current (financial system) events (Fall teaching), some pictures to elicit thoughts. Debt rising fast even at full employment Stock market near peak? Fed funds rate above Taylor rule implied levels. Fed credibility lower under Trump 2.0. Stablecoins after GENIUS. And (not on the syllabus), dollar reserve currency domination eroded (see Eichengreen […]",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}