Posted BY: | NwoReport
The likelihood that the United States will experience an economic recession at some point over the next year has risen to a 40-year high, according to a probability model created by the New York Federal Reserve.
The probability of a recession now stands at 68.2 percent, the highest level since 1982. This means it has now surpassed its November 2007 level, recorded shortly before the credit crunch at 40 percent.
The model analyzes the difference between the yields of three-month and 10-year U.S. Treasury bonds. In recent months, projections have also indicated a slowdown in real GDP growth and a weakening of the labor market within the United States.
Given the banking sector turbulence triggered by Silicon Valley Bank’s collapse, Federal Reserve economists are now forecasting a mild recession.
Trending: China and Russia are increasing their military collaboration, Japan’s foreign minister warns
“Given their assessment of the potential economic effects of the recent banking-sector developments, the staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years,” read the minutes from a March meeting of the Federal Open Market Committee (FOMC).
Former Treasury Secretary Larry Summers has also expressed his view that the odds of a downturn are “probably about 70 percent.”