Recession Probability How risk evolves over time
Why it matters: This chart is the main “risk thermometer.” It shows the system’s recession probability through time.
How to read: Higher values mean the model sees conditions that historically preceded recessions at this horizon. Shaded bands mark past recessions. A rising line means risk is increasing; a falling line means risk is easing.
Important: A high probability does not mean a recession is guaranteed, and a low probability does not mean one is impossible. This is a monitoring signal based on history, not a calendar prediction.
Latest update
What this probability refers to: Probability that the U.S. enters a recession at least once in the next 12 months (through 2026-12-31).
As-of date
2026-01-01
Hybrid probability (preferred)
7.1% (Elevated)
• computed
Yield-curve model
11.0%
Macro-finance model
5.3%
Which model we trust more (w)
0.69
0 = mostly yield curve • 1 = mostly macro-finance
Blending both models
Sensitivity (w ± 0.1)
7.6% → 6.5%
If we slightly change how much weight we give each model, the headline probability would move within this range.
Current reading: Elevated recession risk over the next 12 months (computed from the yield-curve and macro-finance components using the reliability weight). This is a probability estimate based on historical relationships; it is not a guarantee and it does not predict exact timing. Blending both models.
What this is: a monitoring probability derived from historical patterns in financial & macro data.
What this is not: a guarantee, a trading signal, or a prediction of exact recession timing.
What this is not: a guarantee, a trading signal, or a prediction of exact recession timing.
