A central bank governor recently dropped an interesting signal about economic capacity. The latest quarterly GDP figures are painting a tighter picture than previously thought—the output gap appears to be narrowing faster than expected.

What does this mean? Essentially, the economy is running closer to its maximum sustainable capacity. When that gap shrinks, it typically suggests stronger underlying momentum, but also hints at potential inflationary pressures building beneath the surface.

For those tracking macro trends and their ripple effects across risk assets, this kind of commentary from monetary authorities matters. It shapes expectations around future policy moves and liquidity conditions. The revision suggests economic resilience, but could also signal less room for accommodative stances going forward.

Worth watching how this data interpretation influences upcoming policy decisions and market positioning.