Smoothed U.S. Recession Probabilities
Smoothed U.S. Recession Probabilities The probability of recession stands at 0.66%. When this recession indicator exceeds 5% (red line), history suggests that the probability of recession increases significantly. The chart shows the smoothed U.S. recession probabilities indicator on a log scale. Smoothed U.S. recession probabilities are obtained from a dynamic-factor markov-switching model applied to four…