Recession Probability Surges to 93%: UBS(newsweek.com)
newsweek.com
Recession Probability Surges to 93%: UBS
https://www.newsweek.com/recession-probability-surges-93-ubs-2125230
26 comments
It would be necessary to have the list of past predictions from UBS for this figure to have any meaning. Otherwise you fall into the trap of "Economists successfully predicted 10 of the last 4 recessions".
In addition to this, I think the headline is confused because the article later says: "UBS averaged the hard data together with inverted yield curve and credit markets to produce an aggregate recession probability of 52% for July..."
So 52%, not 93%, and I can't find a link to where UBS published this information.
But here are some other recent figures from UBS (or at least attributed to them):
2022-05-05: 0% https://www.ubs.com/global/en/investment-bank/insights-and-d...
2022-06-21: 40% https://finance.yahoo.com/news/odds-hard-landing-u-economy-2...
2022-08-30: 60% https://www.investing.com/news/stock-market-news/ubs-raises-...
2023-07-19: Goldman Sachs says 20% https://www.goldmansachs.com/insights/articles/the-probabili...
2024-08-27: 25% https://www.reuters.com/markets/us/ubs-wealth-management-rai...
I think the number is largely useless, and this article is even moreso.
So 52%, not 93%, and I can't find a link to where UBS published this information.
But here are some other recent figures from UBS (or at least attributed to them):
2022-05-05: 0% https://www.ubs.com/global/en/investment-bank/insights-and-d...
2022-06-21: 40% https://finance.yahoo.com/news/odds-hard-landing-u-economy-2...
2022-08-30: 60% https://www.investing.com/news/stock-market-news/ubs-raises-...
2023-07-19: Goldman Sachs says 20% https://www.goldmansachs.com/insights/articles/the-probabili...
2024-08-27: 25% https://www.reuters.com/markets/us/ubs-wealth-management-rai...
I think the number is largely useless, and this article is even moreso.
It seems betting markets are now allowed in the US? I keep seeing advertisements for them. They'd be an awesome tool for this stuff.
Edit: there's one open bet on a US recession in 2025 on Kalshi that's gone down to only a 5% chance. Sort of fascinating how it's exact opposite of what TFA is saying. I'd link but not sure if that's kosher.
Edit: there's one open bet on a US recession in 2025 on Kalshi that's gone down to only a 5% chance. Sort of fascinating how it's exact opposite of what TFA is saying. I'd link but not sure if that's kosher.
The betting markets are all betting based on whether the US with announce that it's in a recession (I think), which probably has different (lower) odds than actually being in a recession. It at least makes sense that it's different, but that's a huge difference.
I guess it's kinda like betting on who will win an election vs. betting on a candidate conceding an election. The odds aren't necessarily the same, even though they're (on paper) closely related events.
I guess it's kinda like betting on who will win an election vs. betting on a candidate conceding an election. The odds aren't necessarily the same, even though they're (on paper) closely related events.
Is there one for 2026? I’m guessing if there is you’ll see one trending down while the other is trending up, for obvious reasons.
Let’s say, I know recession begins (whatever that means) in exactly 60 days. What are the financially savvy moves to make free money?
Given this bonkers market, even if 100% of the world recognized the US was in recession, I am not sure what you can predict would happen.
Given this bonkers market, even if 100% of the world recognized the US was in recession, I am not sure what you can predict would happen.
You can place your bets against the US, and considering how unstable things are it might pay off down the road. I think that however ugly the economy gets in the next few months/years this isn't the impending collapse of the US economy, so it'll probably improve again eventually. That said, I've considered converting some cash to foreign currencies whose value is less likely to decline as quickly.
Things will probably get worse before they get better and I'm not sure that there's much most people can do about it anyway besides giving up and buying Labubus (https://www.youtube.com/watch?v=l1O6bN2zWSM)
Things will probably get worse before they get better and I'm not sure that there's much most people can do about it anyway besides giving up and buying Labubus (https://www.youtube.com/watch?v=l1O6bN2zWSM)
go to cash so you can buy assets at a lower price
Dollar lost 11% this year.
https://www.tradingview.com/symbols/TVC-DXY/?matchtype=e&tim...
https://www.morganstanley.com/insights/articles/us-dollar-de...
https://www.tradingview.com/symbols/TVC-DXY/?matchtype=e&tim...
https://www.morganstanley.com/insights/articles/us-dollar-de...
well aware. i'm still living in the US, using US dollars to buy US-based assets
Could always buy EUR or CHF
Invest in gold mining stocks and/or ETFs (see NUGT).
Actually, you're already a little late on this. Gold is up almost 40% in 2025 but most observers seem to think it still has room to run.
Actually, you're already a little late on this. Gold is up almost 40% in 2025 but most observers seem to think it still has room to run.
Doesn't gold also go down during a market crash?
Not with the dollar falling against all major world currencies and treasury bond yields rising.
Basically, we have a perfect storm of economic idiocy brewing on multiple fronts and gold and commodities are likely to be one of the few safe havens.
Capital is fleeing the US and not only can the Fed not stop it but it is under political pressure to accelerate it.
Basically, we have a perfect storm of economic idiocy brewing on multiple fronts and gold and commodities are likely to be one of the few safe havens.
Capital is fleeing the US and not only can the Fed not stop it but it is under political pressure to accelerate it.
> UBS notes that it is not yet forecasting a recession at this time, but anticipates an extended phase of stagnant economic growth. Its own "credit metrics-based" recession probability, Fortune writes, has roughly doubled to 41 percent since January.
What is the point in a discussion if no one reads the actual article?
What is the point in a discussion if no one reads the actual article?
"the hard data"
Then perhaps they can just make a program that emits the exact probability at any time - and emit a chart like polymarket's
more likely bias.
Then perhaps they can just make a program that emits the exact probability at any time - and emit a chart like polymarket's
more likely bias.
based on this https://fred.stlouisfed.org/series/SAHMREALTIME we are nowhere close.
> Sahm Recession Indicator signals the start of a recession when the three-month moving average of the national unemployment rate (U3) rises by 0.50 percentage points or more relative to the minimum of the three-month averages from the previous 12 months.
Why 0.5 and not 0.4? Why three-month averages and not four? There are some free parameters that have clearly been fit to make the graph look good historically, and having been proposed in 2019, it has successfully identified one recession, which literally any other indicator also would have identified. Frankly there's a very high likelihood that it's over-fit. I'm guessing after it fails to adequately identify the start of the next recession, economists will want to replace it with one that was made 1 year before that recession, being over-fit even more. Note that these gray regions have clearly been post-hoc altered: the chart pretends that the Sahm Rule would have identified the 2008 recession as starting in Dec 2007, but that's not +0.5 over the min of the last 12 months; that doesn't happen until April 2008. Why did they move the gray box back 4 months? They're basically lying about what their metric would have shown at that time.
I was going to say it successfully "predicted" one recession, but: did it? In 2020, the U3 was at 0.0 in Feb, 0.3 in March, and 4.0(!) in April. You just said that based on this indicator, we are "nowhere close" to a recession. You could easily have said that in Feb or even March of 2020, so "nowhere close" could be as little as one month, or the smallest unit of time this metric considers.
There is no way to say whether we are close to a recession or not using this metric. The absolute value of the y-axis has nothing to do with it: the 1981 recession is identified as starting from a trough of -0.13. The current trend has nothing to do with it: the 1981 recession started immediately after a huge downward trend. A long period of stability ~0% doesn't mean anything (2001, 2020). A period of volatility doesn't mean anything (~1963, ~1986 -- volatility with no recession). All that matters is what the rate of increase is just about to be. So it doesn't make sense to say we are "nowhere close" -- the current value and recent history of this number seem to have almost no bearing whatsoever on when unemployment suddenly spikes. The spikes come out of nowhere. This is not a leading indicator at all: the best it can do is look at a terrible jobs report and say "looks like the recession has already started boys", which is what everyone else would say too if unemployment spikes by 2% in one month. It gives absolutely no information about whether one is about to start next month or not.
Why 0.5 and not 0.4? Why three-month averages and not four? There are some free parameters that have clearly been fit to make the graph look good historically, and having been proposed in 2019, it has successfully identified one recession, which literally any other indicator also would have identified. Frankly there's a very high likelihood that it's over-fit. I'm guessing after it fails to adequately identify the start of the next recession, economists will want to replace it with one that was made 1 year before that recession, being over-fit even more. Note that these gray regions have clearly been post-hoc altered: the chart pretends that the Sahm Rule would have identified the 2008 recession as starting in Dec 2007, but that's not +0.5 over the min of the last 12 months; that doesn't happen until April 2008. Why did they move the gray box back 4 months? They're basically lying about what their metric would have shown at that time.
I was going to say it successfully "predicted" one recession, but: did it? In 2020, the U3 was at 0.0 in Feb, 0.3 in March, and 4.0(!) in April. You just said that based on this indicator, we are "nowhere close" to a recession. You could easily have said that in Feb or even March of 2020, so "nowhere close" could be as little as one month, or the smallest unit of time this metric considers.
There is no way to say whether we are close to a recession or not using this metric. The absolute value of the y-axis has nothing to do with it: the 1981 recession is identified as starting from a trough of -0.13. The current trend has nothing to do with it: the 1981 recession started immediately after a huge downward trend. A long period of stability ~0% doesn't mean anything (2001, 2020). A period of volatility doesn't mean anything (~1963, ~1986 -- volatility with no recession). All that matters is what the rate of increase is just about to be. So it doesn't make sense to say we are "nowhere close" -- the current value and recent history of this number seem to have almost no bearing whatsoever on when unemployment suddenly spikes. The spikes come out of nowhere. This is not a leading indicator at all: the best it can do is look at a terrible jobs report and say "looks like the recession has already started boys", which is what everyone else would say too if unemployment spikes by 2% in one month. It gives absolutely no information about whether one is about to start next month or not.
polymarket says 8%
https://polymarket.com/event/us-recession-in-2025
https://polymarket.com/event/us-recession-in-2025
Keep in mind that is actually a bet both that there is a recession and that the US government admits there's a recession. The odds of that are probably viewed as different than the odds of just a recession.
yeah so true. Kind of like how the Fed sometimes misses on their actions, it's not realtime data, always looking months backward huh?
No, you're trying to draw an equivalence with the Fed here, and its not at all valid. The current US administration fired the BLS commissioner for a bad jobs report and is actively suing news outlets (and installing "fairness checkers" at others). That destroys credibility. There have been accusations that the Fed put their finger on the scale for Biden but none of that is grounded in actual fact; just the fact that the Fed is not aggressively cutting rates just because the President asks for it.
Sort of... No I was thinking back to 2008-2009 actually, sorry, I should have been clearer about that.
Something else most forget is that during the low (or real negative) interest rate time of the 2010s, plenty of talk about how more inflation was desired surfaced from time to time.
As others point out though, the US is a big country, with regions of economic activity. The more I learn about it, the less I know
Something else most forget is that during the low (or real negative) interest rate time of the 2010s, plenty of talk about how more inflation was desired surfaced from time to time.
As others point out though, the US is a big country, with regions of economic activity. The more I learn about it, the less I know
wow tell us something we didnt know
Bears are getting desperate and wishing for a recession,eh?