According to @KobeissiLetter, Moody’s Analytics’ leading economic indicator estimates a 48% probability of a US recession within 12 months as of August, the highest since 2020 and a level Moody’s historical data indicate has not occurred outside recessions (source: Moody’s Analytics via @KobeissiLetter). @KobeissiLetter also notes that the Bureau of Labor Statistics revised non-farm payrolls down by 911,000 for the 12 months ending March 2025, the largest annual downward revision on record, underscoring labor market deterioration (source: BLS via @KobeissiLetter). For trading, the Federal Reserve’s Financial Stability Report highlights that rising recession risk and tighter financial conditions tend to widen risk premia and raise volatility across risk assets (source: Federal Reserve Financial Stability Report 2023), while the IMF has documented a post-2020 increase in Bitcoin and equity return correlations, heightening the transmission of macro shocks to crypto such as BTC and ETH (source: IMF, Crypto Prices Move More in Sync With Stocks, 2022). @KobeissiLetter further asks whether earlier Fed rate cuts could have prevented this deterioration without taking a position (source: @KobeissiLetter).

According to Evan (@StockMKTNewz), JPMorgan has updated its forecast, now expecting Jerome Powell and the Federal Reserve to implement the first interest rate cut in December 2025, instead of the previously anticipated September timeline. The bank also reduced its projected probability of a US recession in 2025 to less than 50 percent (source: @StockMKTNewz, May 13, 2025). For crypto traders, this delayed rate cut could extend the current tight liquidity environment, potentially leading to continued volatility and subdued momentum in major cryptocurrencies like Bitcoin and Ethereum. Investors should closely monitor macroeconomic indicators and Fed communications for any shifts that might impact risk asset flows.

According to The Kobeissi Letter, the 1-year US recession probability, as priced by the S&P 500 earnings yield and the BBB-rated corporate bond spread, has surged to 60%, marking the highest level since 2022. Over the past several weeks, this probability has tripled, indicating increasing investor concern about a potential economic downturn. Historically, such high recession probabilities have preceded significant market corrections, which is highly relevant for traders managing equity and crypto portfolios. Source: The Kobeissi Letter on Twitter, April 26, 2025.