Recession Risk

Higher diesel and broader energy costs are expected to force consumer and business cutbacks, as energy shocks typically precede recessions.

Further disinflation is likely to impair purchasing power and ultimately produce additional job losses, raising the risk of a recessionary outcome.

A 10-year Treasury yield of 8% would impose abnormal economic pressure, producing a very deep recession or near-depression.

Yield-curve inversions across several markets are likely to revive widespread recession concerns, raising perceived US downturn risk in the near term.

Severe consumer delinquencies resemble fourth-quarter 2006 more than third-quarter 2003 despite the AI capex-driven jobs boom, signaling elevated downturn risk.

Demand destruction will require either substantially higher prices, an equity-bubble burst, or sufficient tightening that produces real economic contraction.

Recession odds are declining, helping explain the recent rise in rates alongside an upturn in cyclical growth and elevated inflation.

U.S. recession risk remains low amid a resilient, booming economy, consistent with a long-standing position rather than a fresh call.

Recession risk is expected to remain low through the end of the decade as the US economy continues to withstand repeated stress tests.