Summary
- The recent correction in the stock market has yet to trigger a clear recession warning for the US economy, based on a model that uses S&P 500 drawdowns.
- A probit-based model is currently estimating a roughly 5% probability that the US economy is contracting.
- The evolution of tariff risk in the days and weeks ahead could change the calculus, perhaps quickly, and so the current recession risk estimate should be revised daily for the near term.
Dilok Klaisataporn
By James Picerno
Recession risk appears to be rising, according to Wall Street fund managers, analysts and strategists, based on a poll published this week by CNBC. Higher tariffs are cited as the catalyst. For some observers, the sharp drop in the stock
