Data available as of 11am CT today:
Guest Contribution: “Miran, we’re not in Triffin land anymore”
Today, we’re fortunate to have a guest contribution from Michael Bordo (Rutgers) and Robert N McCauley (BU & Oxford). A version of this post was published on VoxEU.
GS: From 25% Probability to Recession Call?
From Goldman Sachs, Sunday evening:
We are lowering our 2025 Q4/Q4 GDP growth forecast to 0.5% and raising our 12-month recession probability from 35% to 45% following a sharp tightening in financial conditions, foreign consumer boycotts, and a continued spike in policy uncertainty that is likely to depress capital spending by more than we had previously assumed. …
Random Observations
Inversion continues, with 10yr-3mo at same level as on 12/`6. VIX at 45. Kalshi odds on a recession at 68%, highest since trading started in August. EPU at 1203.
Near-Horizon Recession Probability: Estimate for April 2025
Using data through March.
Bill McBride/Calculated Risk on “Recession Watch”
I’m concerned about tariff policy impacting the economy. Usually fiscal, executive and trade policy decisions wouldn’t lead to an immediate recession, but these tariffs are a huge blunder. There have been other unforced errors – like cutting basic research spending – but that is more of a long-term issue.
As an aside: Imagine a tech company announcing they were going to cut spending by eliminating R&D. Their stock would plummet. That is what the U.S. has done with some of the DOGE cuts.
Nowcasts, 4/5
NY Fed nowcast down.
Business Cycle Indicators: Employment in March
Mid-March to be specific.
Has the Recession Already Started?
Even if the answer is yes, we won’t know for a long time.
What a Difference a Day Makes: The Post-Obliteration Day Yield Curve
Inversion deepens (see sky blue line vs. green line):