What is the probability of a recession ?

The Federal Reserve Bank of New York uses the slope of the yield curve, or “term spread,” to calculate the probability of a recession in the United States twelve months ahead. Here, the term spread is defined as the difference between 10-year and 3-month Treasury rates.

The second graph shows that the probability of a recession 12 months from now is well over 50%. Not what we want to hear!



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