Fed Model Shows Over 60% Chance of Recession by 2025, Raising Concerns of Market Declines

• The Fed's recession probability tool shows a 61.47% chance of a recession by January 2025, one of the highest probabilities since the early 1980s

• The tool has accurately predicted every recession since 1966 when the probability exceeds 32%, suggesting a likely recession in 2024

• Recessions typically lead to poor stock market performance as corporate earnings decline

• Other indicators like money supply, lending standards, and valuations also point to potential trouble ahead

• However, history shows recessions and stock downturns are short-lived; patience pays off for long-term investors