Fed indicator shows high recession odds, potentially signaling market volatility ahead
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The Fed's recession probability indicator, based on the yield curve, shows a 58% chance of recession in the next year. This often foreshadows stock market trouble.
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The indicator has correctly predicted every recession since WWII, with one false signal in 1966.
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Other indicators like money supply and leading indicators also point to an economic downturn.
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Historically, recessions are short-lived while economic expansions last years. The stock market tends to recover from bear markets over the long run.
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Market downturns can represent buying opportunities for patient, long-term investors.