Horizon Turbulence

## What this measures

How hard the US operating environment is to read, placed on the whole record since January 2000. **0 is the calmest month in that record and 100 is the most turbulent.** It is the world layer of the Enterprise Intelligence Index, weighed against Foresight Readiness from the Readiness Assessment.

## Components

| Component | Block | Weight | Reads | |---|---|---|---| | OFR Financial Stress Index | Priced | 20% | stress across credit, funding, valuation, safe assets and volatility | | Excess Bond Premium | Priced | 15% | how much extra investors demand to hold corporate credit risk | | 10-year Treasury volatility | Priced | 10% | how violently the price of money is moving | | Economic Policy Uncertainty | Structural | 12% | uncertainty about fiscal, monetary and regulatory policy | | Trade Policy Uncertainty | Structural | 11% | uncertainty about tariffs and trade | | Geopolitical Risk | Structural | 11% | war, terrorism and geopolitical threats | | Credit card delinquency rate | Structural | 11% | how many households are falling behind | | Sahm rule gap | Structural | 10% | how fast unemployment is rising from its low |

Priced stress is 45% and structural pressure 55%. Prices update daily but go quiet when markets are complacent; the structural block reads the policy, geopolitical, household and labor pressure that prices can miss.

## How it is calculated

1. Each component, each month, becomes its percentile within its own monthly record since January 2000. Daily series are averaged within the month; monthly and quarterly series carry forward briefly to fill the current month. 2. The composite is the weighted mean of those percentiles, published when at least 75% of the weight is present. 3. The composite is rescaled so the calmest month in the record reads 0 and the most turbulent reads 100.

## How to read it

A reading of 40 means this month is about 40% of the way from the calmest month since 2000 to the most turbulent. It moves with the whole record, so a reading of 70 is genuinely rare.

## What it does not say

Turbulence is not direction: a high reading means hard to read, not getting worse. Percentiles use the full record, including years after each month, so historical readings are re-expressed on today's scale rather than what the index would have said at the time. A new record high or low re-anchors the scale, and the anchors are published below.

## Current calibration

Calibrated on 2026-10-23 against 322 months, January 2000 to October 2026.

- **0 (calmest month):** May 2014 - **100 (most turbulent month):** September 2001 - **This month:** 61, higher than 61% of months in the record.

Priced stress: OFR Financial Stress Index at the 37th percentile, Excess Bond Premium at the 15th percentile, 10-year Treasury volatility at the 60th percentile. Structural pressure: Economic Policy Uncertainty at the 84th percentile, Trade Policy Uncertainty at the 94th percentile, Geopolitical Risk at the 87th percentile, Sahm rule gap at the 43rd percentile.

## Sources

Office of Financial Research (US Treasury); Federal Reserve Board (Excess Bond Premium, H.15 yields, card delinquency); Bureau of Labor Statistics; Baker, Bloom & Davis (CC BY 4.0); Caldara & Iacoviello (CC BY 4.0).

Methodology: https://www.palanor.com/eii/methodology