A recession is likely to hit the US economy in 2024, a new economic model highlighted by the economist David Rosenberg suggests.
The economic indicator, which Rosenberg calls the “full model,” suggests there’s an 85% chance of a recession striking within the next 12 months.
The model is based on a working National Bureau of Economic Research paper and consists of financial conditions indexes, the debt-service ratio, foreign term spreads, and the level of the yield curve.
“The full model predicted the ‘soft landing’ we saw in 2023 — but now is saying that for 2024, recession probabilities are highly elevated,” Rosenberg said.
The model utilized by Rosenberg also helps explain why the closely followed yield-curve indicator has so far been inaccurate in predicting a recession.
“It also explains why the yield curve didn’t work as a recession predictor in 2017-19: easy financial conditions, extremely low debt service obligations, and favorable foreign term spreads offset the signal from the inverted U.S. yield curve,” Rosenberg said.
The original article contains 338 words, the summary contains 164 words. Saved 51%. I’m a bot and I’m open source!
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A recession is likely to hit the US economy in 2024, a new economic model highlighted by the economist David Rosenberg suggests.
The economic indicator, which Rosenberg calls the “full model,” suggests there’s an 85% chance of a recession striking within the next 12 months.
The model is based on a working National Bureau of Economic Research paper and consists of financial conditions indexes, the debt-service ratio, foreign term spreads, and the level of the yield curve.
“The full model predicted the ‘soft landing’ we saw in 2023 — but now is saying that for 2024, recession probabilities are highly elevated,” Rosenberg said.
The model utilized by Rosenberg also helps explain why the closely followed yield-curve indicator has so far been inaccurate in predicting a recession.
“It also explains why the yield curve didn’t work as a recession predictor in 2017-19: easy financial conditions, extremely low debt service obligations, and favorable foreign term spreads offset the signal from the inverted U.S. yield curve,” Rosenberg said.
The original article contains 338 words, the summary contains 164 words. Saved 51%. I’m a bot and I’m open source!