High Probability Recession Hits U.S. in Late 2023

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Top Chart: Over the past +50 years, the inversions of the 50 day SMA of the 10 year treasury rates minus the 50 day SMA of the 3 month treasury rates have all preceded the start of a U.S. recession (there have been no false indicators or exceptions to this rule). The 8 recessions that occurred over the last half a century have started within an average of 12.18 months from the first day that their 50 day SMA inversions began).

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Bottom Chart: Probability distribution showing the positions of the last 8 recessions (over a +50 yr. period) superimposed on the curve with each recession’s position based on the time from the first day of their respective (10 Yr. minus 3 Mo.) 50 day SMA inversions to the first day of the start of their corresponding recessions. Normal distibution used as best fit with a mean of 12.18 months and a standard deviation of 4.61 months. The current position on the probability curve is denoted by the sliding red vertical arrow starting from time zero (1st day of the latest 50 day SMA inversion) and moving rightwards as time proceeds. Prediction of a 57% probability that a recession will have started on or before late December 2023 and a greater than 95% probability that a recession will have started on or before late July 2024.

 

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