…[According to] the National Bureau of Economic Research] the risk that the U.S. economy will enter into a national recession at some time in the next twelve months currently stands at 1.85%, (i.e. a 1-in-54 chance) which is up by roughly three-tenths of a percentage point since our last snapshot of the U.S. recession probability from late-September 2018.
This version of the original article, by Ironman, has been edited* here by munKNEE.com for length (…) and clarity ([ ]) to provide a fast & easy read.
The U.S. Recession Probability Track [below] shows…the probability of a recession starting in the U.S. during the next 12 months.
We…anticipate that the probability of recession will continue to rise through the end of 2018, since the Fed is expected to hike the Federal Funds Rate again in December 2018.
- As of the close of trading on Friday, 9 November 2018, the CME Group’s Fedwatch Tool was indicating an 76% probability that the Fed will hike rates by a quarter percent to a target range of 2.25% to 2.50% at the end of the Fed’s next meeting on 19 December 2018.
- Looking forward to the Fed’s 20 March 2019 meeting, the Fedwatch Tool indicates a 53% probability that the Fed will hike U.S. interest rates by another quarter point at that time.
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If you want to predict where the recession probability track is likely to head next, please take advantage of our recession odds reckoning tool which, like our Recession Probability Track chart, is also based on Jonathan Wright’s 2006 paper describing a recession forecasting method using the level of the effective Federal Funds Rate and the spread between the yields of the 10-Year and 3-Month Constant Maturity U.S. Treasuries. It’s really easy. Plug in the most recent data available, or the data that would apply for a future scenario that you would like to consider, and compare the result you get in our tool with what we’ve shown in the most recent chart we’ve presented…
(*The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.)
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