Unexpectedly Intriguing!
February 1, 2007

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 41.4%. This figure is based on the current level of the Federal Funds Rate and the yields at market close of the 3-Month Treasury (4.94%) and the 10-Year Treasury (4.79%) on January 31, 2007.

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. For the first time since March 2005, the probability of recession on the date that the FOMC has announced any potential changes in the Federal Funds Rate has substantially receded:

Since the last FOMC meeting, the odds of recession have moved to a seemingly stable position 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 November/early December when the probability of recession neared 50%.

But, thanks to Paul Krugman, it now appears that 2007 will be largely recession proof!

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.com

Thanks in advance!

Recent Posts

Stock Charts and News

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


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

Legal Disclaimer

Materials on this website are published by Political Calculations to provide visitors with free information and insights regarding the incentives created by the laws and policies described. However, this website is not designed for the purpose of providing legal, medical or financial advice to individuals. Visitors should not rely upon information on this website as a substitute for personal legal, medical or financial advice. While we make every effort to provide accurate website information, laws can change and inaccuracies happen despite our best efforts. If you have an individual problem, you should seek advice from a licensed professional in your state, i.e., by a competent authority with specialized knowledge who can apply it to the particular circumstances of your case.