What the recession probability measures
The chart applies the yield-curve model published by the Federal Reserve Bank of New York. It takes the monthly average 10-year Treasury yield minus the 3-month Treasury bill rate (converted to a bond-equivalent yield) and turns that spread into the probability that the US economy will be in recession twelve months later. The formula, a probit model estimated by Arturo Estrella and Frederic Mishkin, is: probability = N(−0.5333 − 0.6330 × spread), where N is the standard normal distribution. Each point is dated by the month of the yields; the New York Fed shows the same number twelve months later, in the month it is a forecast for.
How to read this chart
When long rates are well above short rates the probability stays near 10% or lower. As the curve flattens it rises, and when the spread turns negative (an inverted curve) it passes 30%. Historically, readings above about 30% have come before every recession since the late 1960s, usually by six to eighteen months. Compare the line with the grey recession bands to see the lead time.
The latest reading in context
- At 12.4%, the latest reading is below its 5-year average of 34.1% and below its 10-year average of 24.8%.
- Of all 814 monthly readings since January 1959, 58% were lower than today’s and 42% were higher.
- Direction: down 0.3 points over the past month; down 5.2 points over the past six months; down 14.1 points over the past year.
- The highest value on record is 95.4% (December 1980, 46 years ago); the lowest is 0.1% (September 1982, 44 years ago).
- The full history spans 9 US recessions, shaded grey on the chart.
Why it matters
The yield curve has one of the best track records of any single recession predictor, and investors, banks and the Fed follow it closely. An inversion means markets expect short-term rates to fall, typically because they expect the economy to weaken. It also squeezes bank profits from lending, which can tighten credit by itself.
What moves the recession probability
- The Fed’s policy rate, which sets short-term bill rates
- Expectations for future rates, growth and inflation in long-term yields
- The term premium investors demand for holding long bonds
- Global demand for safe Treasury bonds
Key moments in its history
- 1973, 1979–1981High readings before the recessions of the 1970s and early 1980s.
- 2000 and 2006–2007Rose above 30% before the 2001 and 2008 recessions.
- 2019Inverted briefly; a recession followed in 2020, though caused by the pandemic.
- 2022–2024Reached about 70%, the highest since the early 1980s, during the longest inversion on record, without a recession following by 2024.
Recession Probability data tables
Average by decade
| Decade | Average | High | Low |
|---|---|---|---|
| 2020s (so far) | 28.8% | 70.9% | 3.7% |
| 2010s | 7.3% | 37.9% | 0.2% |
| 2000s | 11.8% | 46.3% | 0.2% |
| 1990s | 9.1% | 27.9% | 0.2% |
| 1980s | 15.5% | 95.4% | 0.1% |
| 1970s | 19.0% | 80.5% | 1.0% |
| 1960s | 19.8% | 41.8% | 5.7% |
| 1950s | 14.7% | 27.8% | 7.7% |
Last 12 months
| Period | Value | Change |
|---|---|---|
| Oct 2026 | 12.4% | −0.3 pts |
| Sep 2026 | 12.8% | −1.1 pts |
| Aug 2026 | 13.9% | −1.3 pts |
| Jul 2026 | 15.2% | −0.9 pts |
| Jun 2026 | 16.1% | +1.1 pts |
| May 2026 | 15.0% | −2.7 pts |
| Apr 2026 | 17.6% | −1.2 pts |
| Mar 2026 | 18.8% | −1.9 pts |
| Feb 2026 | 20.7% | +2.0 pts |
| Jan 2026 | 18.8% | −1.6 pts |
| Dec 2025 | 20.4% | −4.7 pts |
| Nov 2025 | 25.1% | −1.5 pts |
Monthly values. Decade figures are averages of the monthly values in each decade. The complete history is available as a CSV file.
Use this chart on your website
Set the options, check the preview, then copy the code into any HTML page, blog post or sidebar. There is nothing to install and no account to create; the chart refreshes itself when new data is published.
Preview
Free for personal and commercial sites. The only condition: leave the two credit links in the code visible. Every setting is explained on the Embed page, where you can also pick any of our charts.
Recession Probability: questions and answers
Is this an official Federal Reserve forecast?
No. The New York Fed publishes the model as research and notes that it is not an official forecast. We calculate it from Treasury rates with the model’s published coefficients.
Why 10-year minus 3-month instead of 10-year minus 2-year?
Research by the New York Fed found the 10-year/3-month spread has the most reliable record in predicting recessions. The 10-year/2-year spread, shown on our yield curve chart, is the one quoted most often in markets.
Does an inverted yield curve guarantee a recession?
No. It raises the odds, and it has preceded every recession in decades, but the long 2022–2024 inversion was not followed by a recession within the usual window.
Where does the data on this chart come from?
From the Board of Governors of the Federal Reserve System. ChartWidgets downloads the series (GS10, TB3MS) from FRED, the Federal Reserve Bank of St. Louis database, and checks for new releases every day. The last update was on November 4, 2026.