1) Equity signal
The model uses the signed 5-session move in the S&P 500.
Methodology
About the TACO Pressure Index
This site publishes one daily reading built from real market data. The goal is not to predict policy decisions with certainty. The goal is to track how much multi-factor market pressure is building at any given moment.
What data goes into the index
The model uses four live market inputs: the S&P 500, the U.S. 2-year Treasury yield, 5-year breakeven inflation, and the VIX.
What the score is trying to capture
The framework treats falling equities, tighter front-end rates, firmer inflation expectations, and higher volatility as signs of growing market stress. The equity leg is now two-sided: a 5-session drawdown adds pressure, while a 5-session rally adds relief.
How scoring works
2) Rates pressure
60% current 2Y level + 40% positive 5-session rise.
3) Inflation pressure
60% current 5Y breakeven level + 40% positive 5-session rise.
4) Volatility pressure
Current VIX level plus any positive 5-session jump.
Composite score
Composite = clamp((equity pressure − 0.5 × equity relief + rates + inflation + volatility) / 4, 0, 100)
Regime labels
- LOW: 0 to below 25
- ELEVATED: 25 to below 50
- HIGH: 50 to below 75
- EXTREME: 75 to 100
How to interpret the site
A higher score does not mean a policy reversal must happen. It means the market backdrop is putting more stress on the system across several channels at once. In the current build, equity rallies can reduce the composite through a half-weighted relief offset, while rates and inflation still keep a level-sensitive floor even when the last 5 sessions were flat.