Unexpectedly Intriguing!
26 October 2006

The Federal Reserve's Open Market Committee announced yesterday that they would be leaving the Federal Funds Rate unchanged at 5.25%.

Using Political Calculations' recession probability tool, which determines the odds that the U.S. economy will enter into a recession sometime in the next 12 months, we find that the current probability of recession in the U.S. is 43.4%. This figure is based on the current level of the Federal Funds Rate and the yields at market close of the 3-Month Treasury (4.98%) and the 10-Year Treasury (4.76%) on October 25, 2006.

We've also updated our chart that tracks the odds of recession since the Federal Reserve began it's most recent series of rate hikes:

Since the last FOMC meeting, the odds of recession have largely held stable in the lower 40 percents. While the probability of recession has increased slightly since the Fed last left interest rates unchanged, it is still within a narrow range it has been since the Fed set the 5.25% rate in June 2006. The peak occurred in late August as the probability of recession reached slightly over 45%.

In other words, "Move along. Nothing to see here people", which more or less expresses the market's reaction to the Fed's announcement.

About Political Calculations

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

ironman at politicalcalculations

Thanks in advance!

Recent Posts

Indices, Futures, and Bonds

Closing values for previous trading day.

Most Popular Posts
Quick Index

Site Data

This site is primarily powered by:

This page is powered by Blogger. Isn't yours?

CSS Validation

Valid CSS!

RSS Site Feed

AddThis Feed Button

JavaScript

The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.

Other Cool Resources

Blog Roll

Market Links

Useful Election Data
Charities We Support
Shopping Guides
Recommended Reading
Recently Shopped

Seeking Alpha Certified

Archives