A Powell Recession Is Coming?New York Fed Model: A Certainty
NEW YORK (Reuters) – The U.S. will end up triggering a “recession” next year, according to a model used by the New York Fed to gauge the likelihood of a recession, research firm DataTrek said on Monday.Powell recession“(Powell Recession), a recession is almost a certainty.
According to comprehensive media reports, the model tracks the spread between the U.S. 3-month treasury bill and the 10-year bond,FedChairman Powell once said that this is his preferred indicator for assessing recession, and analysts also believe that the model is better than the spread between 2-year and 10-year bond yields in terms of the accuracy of predicting recession.
Nicholas Colas, co-founder of DataTrek, said that the model has shown that the possibility of economic recession is 38%. Considering the past 60 years of history, if the probability of recession of the model exceeds 30%, 9 out of 11 times have accurately predicted recession, so he It is believed that the real probability of recession in the United States is actually close to 100%.
Nicholas Colas pointed out that although the market generally predicts that the Fed’s interest rate hike will slow down to 2 yards in December, the model tells us that the market believes that interest rates will restrict the economy too much, which will eventually trigger a “Bauer recession”.
It is worth mentioning that JPMorgan Chase CEO Jamie Dimon and analysts including Morgan Stanley, Bank of America, and Deutsche Bank also believe that the U.S. will soon fall into recession, which will cause U.S. stocks to plummet by at least 20%.