Recession & stagflation odds
Macro models and markets are flagging real risk — Polymarket shows ~31.5% odds of a U.S. recession by year‑end, Yardeni models place 35% odds of stagflation/37% recession for 2026, and Atlanta’s GDPNow sits at 2.1% growth; some Rabo scenarios even project inflation spiking to 5.8% under extreme supply shocks modeling modeling modeling. Investors should treat tail‑risk planning as actionable, not theoretical.
Polymarket’s “US recession by end of 2026?” market has [recorded] $477.3K in total trading volume since its Sep 29, 2025 launch, signaling elevated participant engagement, and the contract [resolves] to NBER/BEA GDP measures per Polymarket’s analytics page. polymarket.com Ed Yardeni [revised] his scenario weights, cutting the “Meltup” chance to 5% and raising the “Meltdown” outcome—which explicitly now includes a 1970s‑style stagflation—to 35% in his latest outlook. ng.investing.com The Atlanta Fed’s GDPNow [nowcasts] first‑quarter 2026 real GDP growth at 2.1% as of March 6, down from roughly 3.2% earlier in the quarter after recent Census, BLS and ISM releases trimmed nowcasts for PCE and private investment. investinglive.com Large‑scale model runs (NiGEM) cited by regional press show a worst‑case 2026 headline inflation spike to about 5.8% under a prolonged energy‑supply shock, a scenario analysts tie to extended closures around the Strait of Hormuz and sustained Brent above $100/bbl. abc.net.au Markets are already pricing those tail risks: a documented “yield‑curve twist” has pushed short‑term Treasury bills toward ~3.7% while long yields fell, compressing the 2s‑10s spread (a historical recession signal), even as the Fed entered a pre‑meeting blackout ahead of the March 17–18 FOMC. markets.financialcontent.com
