Forecasting The Next Recession
Investing in the right asset classes & sectors at the right stage in the business cycle is one of the most important drivers of performance for investors. The same is true by knowing which asset classes and sectors to avoid and when. What’s more, this “timing factor” may indeed have the greatest impact on your financial future. While predicting market downturns and recessions may be a challenge, it is possible to get an early read on forecasting the next recession by analyzing historical data and late-cycle patterns of key economic and market indicators.
The current analysis, as of April 10th 2018, suggests no immediate recession in the next 6 months. However, it is possible that we experience a market-driven sell-off in the next 6 months. Looking out 12 months and beyond, the probability of a recession increases, with an above-average probability occurring in 18 months – 36 months.
1. GDPNow Forecast – Updated June 15, 2018
For latest GDPNow forecast, please click here to be re-directed to Atlanta Fed’s GDPNow website.
2. Gross Domestic Product – Updated: April 27, 2018)
20. Delinquencies on All Loans and Leases To Consumers, All Commercial Banks – Updated February 22, 2018
Source: Federal Reserve, St. Louis Federal Reserve, Atlanta Federal Reserve, US Treasury & U.S. Bureau of Economic Analysis