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About 83% probabiity inside a yr: Right here’s the edited model of Desk 3 of Ahmed-Chinn (2022), plugging in March 31, 2023 values (in crimson), which I prsented in a UW Milwaukee Department of Economics seminar right this moment (because of my gracious hosts, who offered tons of nice feedback/criticisms).
The US and International 10yr-3mo — as is the close to time period — inversion are actually deeper whereas the present Fed funds price is larger.
Determine 1: US 10 yr-3 mo time period unfold (blue), GDP weighted overseas (Canada, Germany, Japan, UK) 10 yr-3 mo time period unfold (tan), and NBER outlined peak-to-trough recession dates shaded grey. Supply: Fed through FRED, OECD, NBER, and creator’s calculations.
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