CEIC’s newest proprietary indicator suggests that Fed Chair Jerome Powell has probably engineered a soft landing – at least for the remainder of 2024.

Our recession indicator is showing that the US has a 6.3% chance of falling into recession in the next two to three quarters. That’s down from 6.8% a month earlier and the lowest reading since August. (Our definition of recession: two consecutive quarters of negative real GDP growth.)

This predictor uses a binary probit model based on CEIC's Leading Indicator. When it hits 20%, that usually indicates a recession is near: note the spikes before the recessions of the early 2000s, the Great Recession and the pandemic.

While the Fed’s rate hikes have certainly pushed our indicator higher since the second half of 2022, it has barely surpassed 11% since then.

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