- Fed Funds Rate Elevated+2 pts
- Federal Funds Rate ≥4.5% — restrictive monetary policy territoryWhy it matters: Elevated rates above 4.5% indicate restrictive policy that slows growth and increases recession risk
- Fed Funds Rate Very High+3 pts
- Federal Funds Rate ≥5.5% — crisis-risk zoneWhy it matters: Rates above 5.5% historically precede recessions (2000 dot-com, 2007 pre-GFC)
- Inflation Elevated+2 pts
- CPI ≥4.0% — above Fed targetWhy it matters: Inflation above 4% forces Fed tightening and raises recession risk
- Inflation Crisis+3 pts
- CPI ≥6.0% — crisis-level inflationWhy it matters: Inflation at 6%+ indicates severe pricing instability requiring aggressive Fed action
- Unemployment Rising+2 pts
- Unemployment Rate ≥4.5% — labor market deteriorationWhy it matters: Rising unemployment signals economic contraction and weakening demand
- Unemployment High+4 pts
- Unemployment Rate ≥6.0% — recession indicatorWhy it matters: Unemployment at 6%+ is a strong recession signal and indicates broad economic distress
- GDP Contraction+5 pts
- Real GDP growth <0% — recessionWhy it matters: Negative GDP growth defines technical recession and indicates severe economic contraction
- GDP Weak Growth+2 pts
- Real GDP growth <1.5% — pre-recession warningWhy it matters: GDP below 1.5% indicates weak growth and elevated recession risk
- Treasury Flight to Safety+2 pts
- 10Y Treasury Yield <2.5% — investors seeking safetyWhy it matters: Very low yields indicate flight to safety as investors anticipate economic weakness
- Treasury Market Stress+2 pts
- 10Y Treasury Yield >5.0% — bond market stressWhy it matters: Very high yields indicate bond market selling pressure and fiscal/inflation concerns
- Combined Recession Risk+5 pts
- High rates + High unemployment + Weak GDP — multiple recession indicatorsWhy it matters: When 2+ recession indicators trigger simultaneously, recession probability is very high
- Stagflation Risk+4 pts
- High inflation + Weak growth + High unemployment — stagflation scenarioWhy it matters: Stagflation (1970s-style) is policy nightmare with high inflation during economic contraction