Recession Odds at Highest Level In Decades, according to Fed’s Â
It’s looking more likely that we’ll see a recession sometime in the next year!
That is according to a model created by the Federal Reserve Bank of New York.
Tweet on Fed’s probability of recessionÂ
Fed's recession probabilities model looks at the probability the U.S. will be in recession 12 months from now.
The model suggests there's a 57% chance of a recession by next January.#recession pic.twitter.com/DgruW2kiBf— The_Journalbiz (@the_journalbiz) February 14, 2023
FED’s chart on possibility of recessionÂ
The New York Fed’s recession probabilities model looks at the slope of the yield curve—specifically, the difference between 10-year and 3-month Treasury rates—to estimate the probability the U.S. will be in recession 12 months from now. As of last week, the model suggests there’s a 57% chance of a recession next January.
Surprised markets have nevertheless made a comeback this year? DataTrek Research suggests investors may be thinking, if there winds up being a recession over the next year, it’ll be because the Fed has tightened monetary policy. Presumably, when the Fed reverses those moves, the economy will start to recover as well.
