Market-Implied Probability of a Recession Starting Within 1 Year and Market-Implied Probability of Being in a Recession The current market-implied probability of a U.S. recession occurring within the next 12 months is 37%, which is quite high by historical standards. Image: Goldman Sachs Global Investment Research
Probability of Fed Rate Cut With signs of U.S. inflation cooling, can investors and traders expect the Federal Reserve to cut interest rates twice by the end of the year? Image: The Daily Shot
Probability of U.S. Recession Calculated from the Yield Curve The probability of a U.S. recession in 12 months, calculated from the yield curve, stands at 57.8% in July. Image: Federal Reserve Bank of Cleveland
Probability of Negative Returns, Based on S&P 500 Total Returns from 1929-Present When investors lengthen their investment time horizon, they can reduce U.S. equity losses by riding out short-term market fluctuations and benefiting from equities’ long-term growth potential. Image: BofA US Equity & Quant Strategy
Probability of U.S. Recession within a Year Based on the tight spread between the S&P 500 and BBB-rated corporate bonds, the risk of a recession in the United States within one year appears low. Image: J.P. Morgan
Probability of U.S. Recession As Priced Across Asset Classes The S&P 500 predicts a recession likelihood of 0% in the United States. This indicates that the U.S. economy is expected to continue growing and expanding, without any major economic downturn on the horizon. Image: J.P. Morgan
Probability of U.S. Recession The decline in the one-year recession probability based on the S&P 500 and BBB spread is viewed as a positive sign, which could influence market sentiment and investment strategies. Image: J.P. Morgan
Probability of U.S. Recession In the Next 1 Year Goldman Sachs’ outlook on the U.S. economy is optimistic, indicating a favorable sentiment and a low 15% probability of a recession occurring within the next year. Image: Goldman Sachs Global Investment Research
12-Month Rolling Money Market In/(Out)Flows vs. NY Fed 12-Month Ahead Yield Curve Implied Recession Probability The probability of a U.S. recession can significantly influence investor behavior, potentially leading to a rotation out of money markets if the likelihood of a recession diminishes. Image: Goldman Sachs Global Investment Research
Estimated U.S. Recession Probability Despite Fed’s rate hikes, Goldman Sachs does not foresee a recession and remains optimistic about the U.S. economy’s ability to continue growing. Image: Goldman Sachs Global Investment Research