U.S. Recession Chances Are Increasing

Could the fear of a recession change your investment strategies? If so, it might be a good idea to check out Bloomberg’s new recession indicator.

Bloomberg Economics has created a way to determine how close we are to falling into recession. Right now, the indicator estimates the chance of a U.S. recession at some point in the next year is 27%. That’s not good, but there’s no need to panic… yet.

The recession probability model developed by Bloomberg incorporates a range of data: economic conditions, financial markets and gauges of underlying stress. Some indicators, like the yield curve, are flashing warning signs.

If a recession hits next year, the Fed will have little power to stimulate the economy since there’s virtually no wiggle room left because interest rates are historically low.

So, hang onto your hats and keep an eye on this indicator.

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