The U.S. economy’s on uncertain ground.
Depending on which model you believe, we’re either coasting toward a soft landing, bracing for a downturn, or already in a recession.
The spread runs from under 1% to over 70%. Here’s how the odds stack up, and why no one can agree on where we’re headed.
JPMorgan: 40% Recession Odds
Wall Street’s leaning cautious. JPMorgan pegs the chance of a recession by year’s end at about 40%, high enough to keep markets on edge.
New York Fed: 29% and Rising
The Fed’s classic yield-curve model shows 28.9%, nearly double the long-term average. It signals elevated risk, though not a sure bet.
Fed’s Smoothed Model: Just 0.8%
On paper, the Chauvet-Piger smoothed probability says 0.8%, effectively calling recession risks minimal. The catch? It smooths out short-term spikes — maybe too much.
Michaillat Model: Already in Recession?
Pascal Michaillat’s classifier ensemble puts odds at 71% that the U.S. is already in recession, using vacancy and unemployment data.
WSJ Economists: Lower Risk, Stronger Jobs
A recent Wall Street Journal survey finds many economists dialing back fears, pointing to continued job growth as a buffer.
AI Boom: Not a Safety Net
Some argue America’s AI and data center surge could cushion the economy. But analysts warn it won’t offset broad weakness if consumer spending falters.
Yield Curve: Still Inverted
The bond market’s favorite warning light remains inverted, a sign investors don’t buy the “soft landing” narrative.
Corporate Earnings: Mixed Signals
Some companies are beating forecasts, others are warning of trouble ahead. It’s another layer of uncertainty.
Consumer Spending: Slowing But Steady
Households are still spending, but growth is cooling. If that slows further, it tips the balance toward recession.
The Range: 30% to 70%
Models disagree wildly — from under 1% to over 70%. The truth is, the economy’s on the edge, and no one can call it cleanly.
Takeaway
Odds of a U.S. recession depend on who you trust: Wall Street at 40%, the Fed’s yield curve at 29%, or labor-market watchers at 71%. Translation? Risk is real, uncertainty rules, and the argument over whether a downturn is coming — or already here — isn’t ending anytime soon.
