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Conversely, the argument for being in the early expansion phase is supported by indications such as narrowing credit spreads, anticipated Federal Reserve rate cuts, and stabilizing economic growth. Proponents of this view contend that improving liquidity conditions could signify the start of an upward trend in asset prices.
Analyzing Economic Indicators
To analyze where we stand, one must look at various economic indicators. For instance, credit spreads narrowed significantly in late 2024, signaling potential early expansion. Additionally, the 90-day secured overnight financing rate has seen a decline, further supporting the early expansion argument.