The Economy
The purpose of this project is to further understand how things work in the macroeconomy. This is an ongoing project.
The methodology for the recession mode can be found here.
All code can be found here.
Recession Forecasting
Below is the current probability of recession, and how the forecast has changed over time.
Below is the current yield curve as well as how it has changed over time. If you would like to understand why the yield curve is such an important predictor of recessions, please see this video.
The model to predict a recession within the next 12 months takes into account many different spreads in bond durations when predicting a recession. The most important of these in the model is the spread between the 30 year and 1 year treasury bond. You can see that the spread typically is a leading indicator of a recession.
