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Lightning Strikes? US Recession May Strike In September 2023 As Fed Continues To Fight Bidenflation (10Y-2Y Yield Curve Inverted For 112 Straight Days)
Confounded Interest ^ | 12/20/2022 | Anthony B. Sanders

Posted on 12/20/2022 5:39:27 AM PST by Kaiser8408a

Lightning strikes!

The 12-month-ahead probability of recession spiked in November across all of yield curve models. The deterioration in the outlook was most significant in the one that relies on the 3-month/18-month forward spread — Fed Chair Jerome Powell’s favored model — which now sees a 59% chance of recession next year, compared with almost 0% six months ago. Yield curve models see the strongest signal for recession starting around September 2023.

We assess the probability of recession in the months ahead by looking at a suite of models: three yield curve models — which take as their sole input the spreads between 2-year/10-year, 3-month/10-year, and 3-month/18-month forward US Treasury yields, respectively — as well as a model that takes 13 financial and macroeconomic indicators as inputs.

All three yield curves inverted further in November, indicating higher probability of a downturn next year. Notably, the 3-month/18-month forward curve inverted for the first time this year, and the model based on that indicator suggests a 59% chance of recession in 12 months (vs. 32% for the same reference period in the prior update) — that would be in November 2023.

My favorite yield curve is the 10-year – 2-year curve which has been inverted for 112 straight days.

Winter is coming ,,, in September.

(Excerpt) Read more at confoundedinterest.net ...


TOPICS: Business/Economy
KEYWORDS: biden; blogpimp; recession; treasury; yields; zottheretread
Watch for Biden and Jean-Pierre double down on Biden's alleged accomplishments.
1 posted on 12/20/2022 5:39:27 AM PST by Kaiser8408a
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To: Kaiser8408a

As long as they keep spending more than comes in the fed is fighting a losing battle


2 posted on 12/20/2022 5:40:37 AM PST by cableguymn
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Ten a month would help
3 posted on 12/20/2022 5:42:31 AM PST by deport
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To: Kaiser8408a
Can you just imagine all the doom and gloom the MSM would be laying down if it were a Republican administration/Congress?

What a dung heap.

4 posted on 12/20/2022 5:42:39 AM PST by RckyRaCoCo (Please Pray For My Brother Ken.)
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To: Kaiser8408a

Haven’t we already had two consecutive quarters of negative GDP?


5 posted on 12/20/2022 5:43:54 AM PST by EvilCapitalist (81 million votes my ass.)
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To: Kaiser8408a

Like Jo Jo Biden say, “Better, snivit, dribble, Back, wampy divit, pow, Build, butter. How do I get outta here”?


6 posted on 12/20/2022 5:44:49 AM PST by FlingWingFlyer (Hey Amerika! The whole world is watching and laughing their asses off. )
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To: Kaiser8408a

Fed Chair Jerome Powell’s favored model — which now sees a 59% chance of recession next year, compared with almost 0% six months ago. Yield curve models see the strongest signal for recession starting around September 2023.

This is the same Fed that relied on Q2 employment gains being 1.1M new jobs when the reality was a net gain in Q2 of just 10,000. The numbers were probably gamed for the midterm elections. The Fed’s instrumentation is corrupt along with everything else.


7 posted on 12/20/2022 5:56:16 AM PST by Flick Lives (Cui bono)
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To: Kaiser8408a

I dont doubt a recession is here or coming but using inverted yield curves is basically just taking a poll from investors. Investors as a whole are just as clueless about the future as anyone else.


8 posted on 12/20/2022 5:56:27 AM PST by Raycpa
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To: Kaiser8408a

How can you tell?

How can you tell when we have a Recession if the definition can be overridden by those in Power? If a Recession is no longer 2 down quarters, what is it?

It is whatever the White House says it is.


9 posted on 12/20/2022 5:57:25 AM PST by MMusson
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To: Kaiser8408a

Time for Fed stop tightening. I don’t know why the Fed refuses to listen to this market signal. Except when propped up by “Quantitative Easing,” 10-year rates are the market’s inflation expectation. There’s no mystery why businesses can’t get the short-term loans they need to survive when long-term borrowing rates are cheaper than short-term rates. And while prices are still up, inflation is actually down. Although the year-over-year rate is still high, the past five months’s core inflation rates have totaled only about 1%, pointing towards an annual rate of under 2.5%


10 posted on 12/20/2022 6:29:02 AM PST by dangus
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To: EvilCapitalist

The first 2 quarters were negative. That is the definition of a recession, 2 quarters in a row. Q3 was negative, but the media keeps saying that we might be in a recession in 2023. I would bet that Q4 will be negative as well. At what point do we enter into a depression?


11 posted on 12/20/2022 7:28:21 AM PST by Texas resident (Who is running our country?)
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To: Texas resident
“At what point do we enter into a depression?”

Hopefully, as reported by the msm, January of 2025.

Because that means a Republican will have been elected president.

12 posted on 12/20/2022 7:39:44 AM PST by daler
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To: Kaiser8408a

Biden’s accomplishments of dismantling America is working to destroy it’s foundation and allow every uncivilized thing to gain power.

Xi Putin and Kim much happy


13 posted on 12/20/2022 7:49:13 AM PST by Vaduz (LAWYERS )
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To: Kaiser8408a

Not directed at Kaiser, but in general, if you don’t think there is already a recession then you aren’t really paying attention.


14 posted on 12/20/2022 8:20:09 AM PST by NicoDon
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