Remember how I said that at least a few analysts were trying to use ZIRP-adjusted recession-prediction models? Basically, the idea was that it’s tougher to get the 2s-to-10s or 3-month/10-year Treasury yield curves to invert in an era of zero percent interest rates.
So that meant you had to adjust your econometric models. In any event, a Deutsche Bank analyst who has done the work says his model now predicts a 55% chance of recession.
That’s the highest for the current economic cycle, according to Bloomberg. It also fits with my own cycle-based work. Food for thought.
