The probability we were in a recession in February was 1.48%. That's tied for the highest level in the last few years, but still extremely low.
This model uses the major coincident economic indicators to generate a recession probability. Historically when the model is 80% or above for three months, a new recession has started. So we are quite a ways below that.
Some people say Powell was lucky, even though he did not play things perfectly.
I don't know about lucky, inflation doesn't moderate on its own historically, but through monetary policy. He gets credit for ignoring the calls to loosen. I wish they started earlier though.
I think recession fears were warranted especially with how persistent inflation was for a bit, but it seems like people have really let doom and gloom take over and ignored the household savings glut and the relatively strong job market.
Leading indicators for sure were not looking good, but there's a lesson in there for not letting historical patterns dominate current data.
Consumer sentiment for example hasn't been normal since the pandemic and that's a big part of recession forecasting. But if consumers aren't behaving like their sentiment, then that's a big flashing light to stop treating sentiment as reliable for future economic activity.