Definition
A market state where investors prefer growth and higher-beta assets as liquidity and confidence improve.
A "risk-on" environment (which we label as the Loose state on DollarLiquidity.com) is when capital flows from safe havens (cash, Treasuries, gold) into equities, crypto, high-yield bonds, and emerging markets. Indicators include falling VIX, tightening credit spreads, and expanding central bank balance sheets. On the site, a Loose reading means the DLI Liquidity Score is in the bottom 20th percentile of its rolling 5-year distribution — indicating loose liquidity conditions across 10 scored indicators grouped into Policy/Reserves, Funding/Plumbing, Credit/Intermediation, and Risk/Price tiers.