SPSM - The Risk Of Recession Isn't Zero

2024-05-24 11:50:00 ET

Summary

• Wall Street economists increasingly believe the risk of recession has fallen sharply.
• We currently have the longest, consistent period in history where the yield spread between the 10-year Treasury bond and the 3-month Treasury bill is inverted.
• While it may take much longer than many expect, we suspect the risk of recession is likely greater than zero.

As we discussed recently , Wall Street economists increasingly believe the risk of recession has fallen sharply. To wit:

“ Economists don’t think the economy will get even close to a recession. In January, they, on average, forecast sub-1% growth in each of the first three quarters of this year. Now, they expect growth to bottom out this year at an inflation-adjusted 1.4% in the third quarter.” – WSJ

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