Thursday , 20 February 2020

Only 1-in-54 Chance U.S. Economy Will Go Into A Recession Within Next 12 Months

…[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 Ironmanhas been edited* here by 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.

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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