⚠️Probability of a Global Economic Recession and Risks for Cryptocurrencies

Assessing the probability of a global recession involves analyzing indicators like GDP, inverted yield curve, unemployment rate, consumer confidence, and inflation. Declines in international trade 🌍 and stock markets are also important signals.

However, today we will focus on specific metrics:

- Global Economic Policy Uncertainty Index 🌐: Moderate Risk (upward trend, indicating global uncertainty).

- Economic Policy Uncertainty Index for the US 🇺🇸: Moderate Risk (high volatility, similar to 2007-2008).

- Breakeven Inflation Rate 💵: Moderate Risk (downward trend, similar to early 2020).

- U.S. Recession Probability 🇺🇸: Low (slow-moving metric, based on variables like employment and industrial production).

- U.S. Smoothed Recession Probability (Forecast) 🔮: High Risk (forecast with good historical accuracy).

- Sahm Rule Recession 🚨: Moderate Risk (slow metric, usually reacts only to major market downturns).

Currently, about 65% of the 22 metrics indicate moderate to high risk, suggesting potential negative impacts on cryptocurrencies and the global financial context. However, since 2023, Asian liquidity has surpassed Western economies, highlighting the importance of monitoring indicators from China, India, Korea, and others.

Generally, these metrics take up to 2 years to materialize a recession, meaning short-term impact may be limited but should not be overlooked.

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