Reassessing Recession Risk

Check out the accompanying pdf and chart collection. Executive Summary: The prospects of a prolonged war in the Middle East heighten the chance of a recession in the US. That’s not our base-case outlook, but we are raising the odds we see of a recession before year-end 2024 to 30% from 25%. The other 70% represents the rolling recessions/recoveries scenario we expect to continue; it’s tough to envision a recession when consumers have the support of such a robust labor market. … But our worry list has expanded with the recent addition of a potential debt crisis and now the escalation of Middle East hostilities. Additionally, we’re monitoring the banking industry for any sign of an emergent credit crunch.