Decline In U.S. Recession Odds Stalls With Pause In Fed Rate Cuts

2025-03-18 11:00:00 ET

Summary

• As expected, the recent plunge in the probability of a recession someday being determined to have started at some time in the next twelve months stalled out above the 20% threshold.
• The recession probability based on Wright's method is unlikely to drop lower until the Fed lowers the Federal Funds Rate below its current target range of 4.25-4.50%.
• The Fed's reductions to the Federal Funds Rate released some of the building recessionary pressure from the Fed, having boosted short-term interest rates in 2022 and 2023 to combat the previous administration's runaway inflation.

As expected , the recent plunge in the probability of a recession someday being determined to have started at some time in the next twelve months stalled out above the 20% threshold....

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