What’s the probability of a recession within the next 12 months?
According to the Fed model using the US Treasury yield curve, there is a 52% chance of a recession over the next year.
This is down from the 71% peak recorded in May 2023.
Over the last 40 years, each time this probability has exceeded 30% the US economy experienced an economic downturn within 2 years.
Meanwhile, the yield curve has been inverted for over 700 days, the longest stretch in history.
A soft landing may still be difficult to attain.
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