Moody's Recession Model Is Just 1 Percentage Point Away From a Signal That Has Never Been Wrong.

Moody's AI-driven recession model assigns a 49% probability of a recession, just below the 50% threshold that historically preceded recessions in 80 years of backtested data. The reading signals elevated recession risk and could increase caution among investors, with potential knock-on effects for credit spreads, yields and risk assets if probabilities move above the historical trigger.

Analysis

Moody's AI-driven recession model assigns a 49% probability of a recession, just below the 50% threshold that historically preceded recessions in 80 years of backtested data. The reading signals elevated recession risk and could increase caution among investors, with potential knock-on effects for credit spreads, yields and risk assets if probabilities move above the historical trigger.