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Recession risk continues to grow
July 11, 2019

From the Wall Street Journal:

Two different financial models used by the Federal Reserve Banks of New York and Cleveland each show that the probability of a recession in the next 12 months has risen to about 1 in 3, odds last reached in 2007.

The likelihood has increased as the yield on the 10-year Treasury note, which decreases when bond prices rise, has fallen to multiyear lows. The decline has been fueled in part by expectations that the Federal Reserve could reduce its target range for its overnight interest rate more than once this year.

Investors remain divided about whether an inverted yield curve is signaling a downturn is coming. One reason is recent upbeat data, such as Friday's jobs report for June, which showed the U.S. added more jobs than economists had forecast. Another is that the Fed has indicated possible rate cuts, which could lower borrowing costs for consumers and businesses, potentially stimulating more growth and investment.

Continue reading at the Wall Street Journal...

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