Recession Odds Spike to 58% as Key Indicators Point to Looming Economic Trouble
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The Federal Reserve Bank of New York's recession probability indicator is showing a 58% chance of a recession in the next 12 months.
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This indicator has correctly predicted every recession since World War 2 by tracking the yield curve spread between 10-year Treasuries and 3-month T-bills.
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An inversion of the yield curve has preceded every recession over the past 65 years.
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Other economic indicators like contracting money supply and declines in the Conference Board Leading Economic Index also point to impending economic trouble.
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Historically, recessions and bear markets have been short-lived compared to economic expansions and bull markets, so long-term investors could view any major pullbacks as a buying opportunity.