No US Recession By End Of 2009?

Following up on my earlier post today on the NY Fed’s model that predicts the probability of U.S. recession using the Treasury spread, here’s a graph above with a “closer look” at the recession probabilities from January 2000 to January 2010 (data here). The shaded area on the left is the 2001 recession (March-November) and the right shaded area is the period from when the current recession started (Dec. 2007) and January 2009.

As the data and graph suggest, there is almost no possibility that the economy will be in recession by the middle of this year according to the Fed’s model, which has accurately predicted the last 7 recessions, back to 1960.

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