What's the yield curve saying?
Here's where it gets interesting: The Fed published a yield curve study a few years ago. It concluded that you can use the spread between 3-month Treasury bill yields and 10-year Treasury Note yields to estimate the probability of a recession within the next four quarters.
A year ago, 10-year notes yielded 69 basis points MORE than 3-month bills. That indicated a paltry 10% recession risk. Now, 10-year notes are yielding 27 basis points LESS than 3-month bills. That indicates about a 1-in-3 chance of recession. Stated another way, the odds of a big economic downturn have tripled.
Hard landing anyone?