US Recession Risks Drop as Market Outlook Improves

Recent indicators suggest that the U.S. may avoid a recession in 2024, reversing earlier concerns.

Data from Polymarket shows that as of September 9, the probability of a recession has fallen to just 7%, a significant drop from August’s peak of 30%. This prediction market bet, which runs until the end of the year, has garnered nearly $245,000 in wagers.

A recession would be marked by two consecutive quarters of negative GDP growth. Despite recent weak job reports, the overall outlook has improved. Speculation is also swirling around a potential 25 basis point interest rate cut by the Federal Reserve, though the exact impact remains uncertain.

Economic opinions are mixed. Economist Peter Schiff believes that the Fed’s actions won’t stave off a recession and suggests that the U.S. might already be in one.

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Meanwhile, Market Maestro forecasts a recession could materialize within the next 12 to 24 months, with a possible soft landing if conditions stabilize. Conversely, Henrik Zeberg anticipates a near-certain recession, predicting a rally in markets before a downturn.

Overall, the likelihood of a recession hinges on the forthcoming Federal Reserve interest rate decision.

Alexander Stefanov