Financial markets are feeling the heat amid fears that aggressive tightening plans by the Federal Reserve have pushed the US economy to the brink of recession. Headlines scream that a downturn is imminent as stocks sell off, Treasury yields fall and corporate spreads widen. But proprietary indicators from Capital Economics show how these recession fears may be misplaced. Our exclusive US Recession Watch report brings you the latest readings from our series of trackers which show that a recession is neither imminent nor inevitable. This compact report surveys our trackers, which are based on probit models using variables which have been most accurate in predicting recessions, to cut through the headlines and show you what the key economic and financial market indicators are really saying about the risks. Our June report includes analysis of:
- Our composite Recession Tracker suggesting near-zero chance of a US recession in the next 12 months;
- How falling equities prices are a poor indicator of recession odds;
- How recession risks could increase as growth slows – but also how current conditions suggest a relatively mild recession in the event.