What Happens When the Leading Economic Index Turns Negative?
The Leading Economic Index anticipates recessions by 6-12 months. What happens when its six-month change turns negative, warning of contraction ahead?
Trigger: Leading Index for US six-month change turns negative 2% or worse
The Mechanics
The St Louis Fed's Leading Economic Index (USSLIND) aggregates forward-looking indicators: yield curve, stock prices, building permits, initial claims, manufacturing orders, and consumer expectations. The six-month annualized change is the most reliable recession signal: a decline below negative 2% has preceded every US recession since 1960 with a median lead time of six months.
Unlike coincident indicators (GDP, employment), leading indicators capture expectations and forward commitments. When permits fall, construction slows 3-6 months later. When orders drop, production slows within a quarter. When the yield curve inverts, credit contracts over 12-24 months. Aggregating these channels into one index dampens noise and captures broad-based weakening.
The Conference Board LEI and St Louis Fed LEI usually move together, but their methodologies differ. The St Louis version uses a factor-model approach drawing on fewer but cleaner financial variables, while the Conference Board version incorporates more consumer and industrial survey data. Divergences between them can reveal whether financial or real-economy channels are driving the signal.
Historical Context
USSLIND six-month changes below -2% have preceded each recession since 1970. The 1973-1975 recession saw the LEI turn negative in late 1973 with peak six-month declines of -5%. The 1980-1982 double-dip produced two separate LEI collapses. The 2001 recession was preceded by LEI turning negative in early 2000. The 2008 recession showed LEI turning negative in December 2007, the exact month the recession began. The 2022-2023 period saw LEI turn negative for over 20 consecutive months without triggering a formal recession, the longest such streak on record and a reason some economists questioned the indicator's continuing reliability in the post-COVID economy.
Market Impact
LEI turning negative historically precedes 10-25% equity drawdowns over the following 6-12 months. The most severe outcomes pair LEI declines with credit-spread widening.
LEI negative turns coincide with the Fed preparing to cut. TLT typically rallies 10-20% as markets price the easing cycle.
Small caps are more sensitive to credit tightening and domestic demand weakness. IWM typically underperforms SPY by 500-1500 bps in the 12 months following LEI turning sharply negative.
Industrials (XLI), materials, and consumer discretionary (XLY) underperform defensive sectors by wide margins. The rotation often begins before LEI turns negative but accelerates on confirmation.
Gold typically outperforms as real yields fall. The gold-to-S&P ratio often marks major lows when LEI first turns negative.
Initial DXY strength from flight-to-quality flows, then weakness as Fed easing widens policy differentials against foreign central banks.
What to Watch For
- -Six-month LEI change below negative 3% annualized
- -Credit spreads widening above 500 bps confirming the LEI signal
- -Yield curve un-inverting (bull steepener)
- -ISM Manufacturing falling below 45 confirming broad-based weakness
- -Continuing claims rising above 2.0 million confirming labor deterioration
How to Interpret Current Conditions
Track USSLIND and its six-month annualized change monthly. Compare against the Conference Board LEI and the Convex Recession Index for convergence or divergence. LEI weakness alongside tightening credit spreads is the most concerning combination, while LEI weakness with credit spreads still tight often produces the false-signal scenarios (2022-2023).
Per-Asset Deep Dives
Dedicated analysis of how this scenario affects each asset class individually.
LEI turning negative historically precedes 10-25% equity drawdowns over the following 6-12 months. The most severe outcomes pair LEI declines with credit-spread widening.
LEI negative turns coincide with the Fed preparing to cut. TLT typically rallies 10-20% as markets price the easing cycle.
Small caps are more sensitive to credit tightening and domestic demand weakness. IWM typically underperforms SPY by 500-1500 bps in the 12 months following LEI turning sharply negative.
Industrials (XLI), materials, and consumer discretionary (XLY) underperform defensive sectors by wide margins. The rotation often begins before LEI turns negative but accelerates on confirmation.
Gold typically outperforms as real yields fall. The gold-to-S&P ratio often marks major lows when LEI first turns negative.
Initial DXY strength from flight-to-quality flows, then weakness as Fed easing widens policy differentials against foreign central banks.
When the Leading Economic Index Turns Negative, HY Credit Spread (OAS) typically responds to the changing macro environment. ICE BofA High Yield Option-Adjusted Spread, the market's price of default risk. This scenario is particularly relevant for credit & financial stress because changes in Leading Index for US directly influence the macro environment for HY Credit Spread (OAS). Investors should monitor both the trigger condition and HY Credit Spread (OAS)'s response to position accordingly.
When the Leading Economic Index Turns Negative, IG Credit Spread (OAS) typically responds to the changing macro environment. ICE BofA Investment Grade OAS, credit stress in high-quality corporate bonds. This scenario is particularly relevant for credit & financial stress because changes in Leading Index for US directly influence the macro environment for IG Credit Spread (OAS). Investors should monitor both the trigger condition and IG Credit Spread (OAS)'s response to position accordingly.
When the Leading Economic Index Turns Negative, HY Effective Yield typically responds to the changing macro environment. HY corporate bond effective yield, total return required by junk bond investors. This scenario is particularly relevant for credit & financial stress because changes in Leading Index for US directly influence the macro environment for HY Effective Yield. Investors should monitor both the trigger condition and HY Effective Yield's response to position accordingly.
When the Leading Economic Index Turns Negative, IG Effective Yield typically responds to the changing macro environment. IG corporate bond effective yield, cost of investment-grade corporate borrowing. This scenario is particularly relevant for credit & financial stress because changes in Leading Index for US directly influence the macro environment for IG Effective Yield. Investors should monitor both the trigger condition and IG Effective Yield's response to position accordingly.
When the Leading Economic Index Turns Negative, BBB Credit Spread typically responds to the changing macro environment. BBB-rated corporate bond OAS, the lowest rung of investment grade. This scenario is particularly relevant for credit & financial stress because changes in Leading Index for US directly influence the macro environment for BBB Credit Spread. Investors should monitor both the trigger condition and BBB Credit Spread's response to position accordingly.
When the Leading Economic Index Turns Negative, AAA Credit Spread typically responds to the changing macro environment. AAA-rated corporate bond OAS, flight-to-quality indicator. This scenario is particularly relevant for credit & financial stress because changes in Leading Index for US directly influence the macro environment for AAA Credit Spread. Investors should monitor both the trigger condition and AAA Credit Spread's response to position accordingly.
When the Leading Economic Index Turns Negative, Aaa-10Y Treasury Spread typically responds to the changing macro environment. Moody's Aaa corporate minus 10Y Treasury, credit risk premium for top-rated corporates. This scenario is particularly relevant for credit & financial stress because changes in Leading Index for US directly influence the macro environment for Aaa-10Y Treasury Spread. Investors should monitor both the trigger condition and Aaa-10Y Treasury Spread's response to position accordingly.
When the Leading Economic Index Turns Negative, Baa-10Y Treasury Spread typically responds to the changing macro environment. Moody's Baa minus 10Y Treasury, a wider measure of corporate credit risk. This scenario is particularly relevant for credit & financial stress because changes in Leading Index for US directly influence the macro environment for Baa-10Y Treasury Spread. Investors should monitor both the trigger condition and Baa-10Y Treasury Spread's response to position accordingly.
When the Leading Economic Index Turns Negative, Financial Conditions (NFCI) typically responds to the changing macro environment. Chicago Fed National Financial Conditions Index, positive = tighter than average. This scenario is particularly relevant for credit & financial stress because changes in Leading Index for US directly influence the macro environment for Financial Conditions (NFCI). Investors should monitor both the trigger condition and Financial Conditions (NFCI)'s response to position accordingly.
When the Leading Economic Index Turns Negative, Adjusted NFCI typically responds to the changing macro environment. NFCI adjusted for prevailing economic conditions, isolates financial stress from the cycle. This scenario is particularly relevant for credit & financial stress because changes in Leading Index for US directly influence the macro environment for Adjusted NFCI. Investors should monitor both the trigger condition and Adjusted NFCI's response to position accordingly.
When the Leading Economic Index Turns Negative, Financial Stress Index (StL) typically responds to the changing macro environment. St. Louis Fed Financial Stress Index, below zero = below-average stress. This scenario is particularly relevant for credit & financial stress because changes in Leading Index for US directly influence the macro environment for Financial Stress Index (StL). Investors should monitor both the trigger condition and Financial Stress Index (StL)'s response to position accordingly.
When the Leading Economic Index Turns Negative, SLOOS: C&I Loan Tightening typically responds to the changing macro environment. Senior Loan Officer Survey, net % of banks tightening standards on C&I loans. This scenario is particularly relevant for credit & financial stress because changes in Leading Index for US directly influence the macro environment for SLOOS: C&I Loan Tightening. Investors should monitor both the trigger condition and SLOOS: C&I Loan Tightening's response to position accordingly.
When the Leading Economic Index Turns Negative, SLOOS: Credit Card Tightening typically responds to the changing macro environment. Net % of banks tightening credit card lending standards. This scenario is particularly relevant for credit & financial stress because changes in Leading Index for US directly influence the macro environment for SLOOS: Credit Card Tightening. Investors should monitor both the trigger condition and SLOOS: Credit Card Tightening's response to position accordingly.
When the Leading Economic Index Turns Negative, Credit Card Delinquency Rate typically responds to the changing macro environment. Delinquency rate on credit card loans, consumer stress indicator. This scenario is particularly relevant for credit & financial stress because changes in Leading Index for US directly influence the macro environment for Credit Card Delinquency Rate. Investors should monitor both the trigger condition and Credit Card Delinquency Rate's response to position accordingly.
When the Leading Economic Index Turns Negative, WTI Crude Oil (FRED) typically responds to the changing macro environment. West Texas Intermediate crude oil spot price. This scenario is particularly relevant for commodities because changes in Leading Index for US directly influence the macro environment for WTI Crude Oil (FRED). Investors should monitor both the trigger condition and WTI Crude Oil (FRED)'s response to position accordingly.
When the Leading Economic Index Turns Negative, Brent Crude Oil (FRED) typically responds to the changing macro environment. Brent crude oil spot price, the global benchmark. This scenario is particularly relevant for commodities because changes in Leading Index for US directly influence the macro environment for Brent Crude Oil (FRED). Investors should monitor both the trigger condition and Brent Crude Oil (FRED)'s response to position accordingly.
When the Leading Economic Index Turns Negative, Henry Hub Natural Gas typically responds to the changing macro environment. Henry Hub natural gas spot price, US benchmark. This scenario is particularly relevant for commodities because changes in Leading Index for US directly influence the macro environment for Henry Hub Natural Gas. Investors should monitor both the trigger condition and Henry Hub Natural Gas's response to position accordingly.
When the Leading Economic Index Turns Negative, Copper Price (Global) typically responds to the changing macro environment. Global copper price, "Dr. Copper" is a leading economic indicator. This scenario is particularly relevant for commodities because changes in Leading Index for US directly influence the macro environment for Copper Price (Global). Investors should monitor both the trigger condition and Copper Price (Global)'s response to position accordingly.
When the Leading Economic Index Turns Negative, VIX Index typically responds to the changing macro environment. CBOE Volatility Index, the "fear gauge" measuring S&P 500 expected volatility. This scenario is particularly relevant for volatility because changes in Leading Index for US directly influence the macro environment for VIX Index. Investors should monitor both the trigger condition and VIX Index's response to position accordingly.
When the Leading Economic Index Turns Negative, EM Dollar Index typically responds to the changing macro environment. Dollar index weighted by emerging-market trading partners. This scenario is particularly relevant for fx & dollar because changes in Leading Index for US directly influence the macro environment for EM Dollar Index. Investors should monitor both the trigger condition and EM Dollar Index's response to position accordingly.
When the Leading Economic Index Turns Negative, EUR/USD typically responds to the changing macro environment. Euro to US dollar exchange rate. This scenario is particularly relevant for fx & dollar because changes in Leading Index for US directly influence the macro environment for EUR/USD. Investors should monitor both the trigger condition and EUR/USD's response to position accordingly.
When the Leading Economic Index Turns Negative, JPY/USD typically responds to the changing macro environment. Japanese yen to US dollar exchange rate. This scenario is particularly relevant for fx & dollar because changes in Leading Index for US directly influence the macro environment for JPY/USD. Investors should monitor both the trigger condition and JPY/USD's response to position accordingly.
When the Leading Economic Index Turns Negative, CNY/USD typically responds to the changing macro environment. Chinese yuan to US dollar exchange rate. This scenario is particularly relevant for fx & dollar because changes in Leading Index for US directly influence the macro environment for CNY/USD. Investors should monitor both the trigger condition and CNY/USD's response to position accordingly.
When the Leading Economic Index Turns Negative, BRL/USD typically responds to the changing macro environment. Brazilian real to US dollar exchange rate. This scenario is particularly relevant for fx & dollar because changes in Leading Index for US directly influence the macro environment for BRL/USD. Investors should monitor both the trigger condition and BRL/USD's response to position accordingly.
When the Leading Economic Index Turns Negative, Real Effective Exchange Rate typically responds to the changing macro environment. BIS real effective exchange rate for the US dollar, inflation-adjusted competitiveness. This scenario is particularly relevant for fx & dollar because changes in Leading Index for US directly influence the macro environment for Real Effective Exchange Rate. Investors should monitor both the trigger condition and Real Effective Exchange Rate's response to position accordingly.
When the Leading Economic Index Turns Negative, Trade Balance typically responds to the changing macro environment. US trade balance in goods and services, negative = trade deficit. This scenario is particularly relevant for fx & dollar because changes in Leading Index for US directly influence the macro environment for Trade Balance. Investors should monitor both the trigger condition and Trade Balance's response to position accordingly.
When the Leading Economic Index Turns Negative, Bitcoin typically responds to the changing macro environment. Bitcoin spot price, the original cryptocurrency and macro risk-on barometer. This scenario is particularly relevant for crypto because changes in Leading Index for US directly influence the macro environment for Bitcoin. Investors should monitor both the trigger condition and Bitcoin's response to position accordingly.
When the Leading Economic Index Turns Negative, Ethereum typically responds to the changing macro environment. Ethereum spot price, the leading smart contract platform token. This scenario is particularly relevant for crypto because changes in Leading Index for US directly influence the macro environment for Ethereum. Investors should monitor both the trigger condition and Ethereum's response to position accordingly.
When the Leading Economic Index Turns Negative, WTI Crude Oil typically responds to the changing macro environment. WTI crude oil price from market feeds. This scenario is particularly relevant for commodities because changes in Leading Index for US directly influence the macro environment for WTI Crude Oil. Investors should monitor both the trigger condition and WTI Crude Oil's response to position accordingly.
When the Leading Economic Index Turns Negative, Brent Crude Oil typically responds to the changing macro environment. Brent crude oil price, the global benchmark. This scenario is particularly relevant for commodities because changes in Leading Index for US directly influence the macro environment for Brent Crude Oil. Investors should monitor both the trigger condition and Brent Crude Oil's response to position accordingly.
When the Leading Economic Index Turns Negative, Natural Gas typically responds to the changing macro environment. Natural gas spot price. This scenario is particularly relevant for commodities because changes in Leading Index for US directly influence the macro environment for Natural Gas. Investors should monitor both the trigger condition and Natural Gas's response to position accordingly.
When the Leading Economic Index Turns Negative, Nasdaq 100 ETF (QQQ) typically responds to the changing macro environment. Invesco QQQ tracking the Nasdaq 100, tech-heavy growth index. This scenario is particularly relevant for equity index because changes in Leading Index for US directly influence the macro environment for Nasdaq 100 ETF (QQQ). Investors should monitor both the trigger condition and Nasdaq 100 ETF (QQQ)'s response to position accordingly.
When the Leading Economic Index Turns Negative, Dow Jones ETF (DIA) typically responds to the changing macro environment. SPDR Dow Jones Industrial Average ETF, tracks the 30 blue-chip Dow components. This scenario is particularly relevant for equity index because changes in Leading Index for US directly influence the macro environment for Dow Jones ETF (DIA). Investors should monitor both the trigger condition and Dow Jones ETF (DIA)'s response to position accordingly.
When the Leading Economic Index Turns Negative, S&P 500 Equal Weight (RSP) typically responds to the changing macro environment. Equal-weight S&P 500, measures market breadth vs cap-weighted SPY. This scenario is particularly relevant for equity index because changes in Leading Index for US directly influence the macro environment for S&P 500 Equal Weight (RSP). Investors should monitor both the trigger condition and S&P 500 Equal Weight (RSP)'s response to position accordingly.
When the Leading Economic Index Turns Negative, Emerging Markets (EEM) typically responds to the changing macro environment. iShares MSCI Emerging Markets ETF. This scenario is particularly relevant for equity index because changes in Leading Index for US directly influence the macro environment for Emerging Markets (EEM). Investors should monitor both the trigger condition and Emerging Markets (EEM)'s response to position accordingly.
When the Leading Economic Index Turns Negative, China Large-Cap (FXI) typically responds to the changing macro environment. iShares China Large-Cap ETF, proxy for Chinese equity market. This scenario is particularly relevant for equity index because changes in Leading Index for US directly influence the macro environment for China Large-Cap (FXI). Investors should monitor both the trigger condition and China Large-Cap (FXI)'s response to position accordingly.
When the Leading Economic Index Turns Negative, EAFE Developed (EFA) typically responds to the changing macro environment. iShares MSCI EAFE ETF, developed markets excluding US and Canada. This scenario is particularly relevant for equity index because changes in Leading Index for US directly influence the macro environment for EAFE Developed (EFA). Investors should monitor both the trigger condition and EAFE Developed (EFA)'s response to position accordingly.
When the Leading Economic Index Turns Negative, Germany / DAX (EWG) typically responds to the changing macro environment. iShares MSCI Germany ETF, proxy for the DAX and German equity market. This scenario is particularly relevant for equity index because changes in Leading Index for US directly influence the macro environment for Germany / DAX (EWG). Investors should monitor both the trigger condition and Germany / DAX (EWG)'s response to position accordingly.
When the Leading Economic Index Turns Negative, Japan / Nikkei (EWJ) typically responds to the changing macro environment. iShares MSCI Japan ETF, proxy for the Nikkei 225 and Japanese equity market. This scenario is particularly relevant for equity index because changes in Leading Index for US directly influence the macro environment for Japan / Nikkei (EWJ). Investors should monitor both the trigger condition and Japan / Nikkei (EWJ)'s response to position accordingly.
When the Leading Economic Index Turns Negative, 7-10Y Treasury (IEF) typically responds to the changing macro environment. iShares 7-10 Year Treasury Bond ETF. This scenario is particularly relevant for bonds & duration because changes in Leading Index for US directly influence the macro environment for 7-10Y Treasury (IEF). Investors should monitor both the trigger condition and 7-10Y Treasury (IEF)'s response to position accordingly.
When the Leading Economic Index Turns Negative, 1-3Y Treasury (SHY) typically responds to the changing macro environment. iShares 1-3 Year Treasury Bond ETF, short duration. This scenario is particularly relevant for bonds & duration because changes in Leading Index for US directly influence the macro environment for 1-3Y Treasury (SHY). Investors should monitor both the trigger condition and 1-3Y Treasury (SHY)'s response to position accordingly.
When the Leading Economic Index Turns Negative, High Yield Credit (HYG) typically responds to the changing macro environment. iShares iBoxx High Yield Corporate Bond ETF. This scenario is particularly relevant for credit & financial stress because changes in Leading Index for US directly influence the macro environment for High Yield Credit (HYG). Investors should monitor both the trigger condition and High Yield Credit (HYG)'s response to position accordingly.
When the Leading Economic Index Turns Negative, IG Credit (LQD) typically responds to the changing macro environment. iShares iBoxx Investment Grade Corporate Bond ETF. This scenario is particularly relevant for credit & financial stress because changes in Leading Index for US directly influence the macro environment for IG Credit (LQD). Investors should monitor both the trigger condition and IG Credit (LQD)'s response to position accordingly.
When the Leading Economic Index Turns Negative, TIPS (TIP) typically responds to the changing macro environment. iShares TIPS Bond ETF, inflation-protected Treasuries. This scenario is particularly relevant for bonds & duration because changes in Leading Index for US directly influence the macro environment for TIPS (TIP). Investors should monitor both the trigger condition and TIPS (TIP)'s response to position accordingly.
When the Leading Economic Index Turns Negative, Gold ETF (GLD) typically responds to the changing macro environment. SPDR Gold Shares, largest gold ETF. This scenario is particularly relevant for commodities because changes in Leading Index for US directly influence the macro environment for Gold ETF (GLD). Investors should monitor both the trigger condition and Gold ETF (GLD)'s response to position accordingly.
When the Leading Economic Index Turns Negative, Oil ETF (USO) typically responds to the changing macro environment. United States Oil Fund, WTI crude oil futures ETF. This scenario is particularly relevant for commodities because changes in Leading Index for US directly influence the macro environment for Oil ETF (USO). Investors should monitor both the trigger condition and Oil ETF (USO)'s response to position accordingly.
When the Leading Economic Index Turns Negative, Agriculture ETF (DBA) typically responds to the changing macro environment. Invesco DB Agriculture Fund, broad agricultural commodities. This scenario is particularly relevant for commodities because changes in Leading Index for US directly influence the macro environment for Agriculture ETF (DBA). Investors should monitor both the trigger condition and Agriculture ETF (DBA)'s response to position accordingly.
When the Leading Economic Index Turns Negative, US Dollar Bull (UUP) typically responds to the changing macro environment. Invesco DB US Dollar Index Bullish Fund. This scenario is particularly relevant for fx & dollar because changes in Leading Index for US directly influence the macro environment for US Dollar Bull (UUP). Investors should monitor both the trigger condition and US Dollar Bull (UUP)'s response to position accordingly.
When the Leading Economic Index Turns Negative, GBP/USD (FRED) typically responds to the changing macro environment. GBP/USD exchange rate from FRED. This scenario is particularly relevant for fx & dollar because changes in Leading Index for US directly influence the macro environment for GBP/USD (FRED). Investors should monitor both the trigger condition and GBP/USD (FRED)'s response to position accordingly.
When the Leading Economic Index Turns Negative, GBP/USD typically responds to the changing macro environment. GBP/USD spot rate from Yahoo Finance. This scenario is particularly relevant for fx & dollar because changes in Leading Index for US directly influence the macro environment for GBP/USD. Investors should monitor both the trigger condition and GBP/USD's response to position accordingly.
When the Leading Economic Index Turns Negative, EUR/GBP typically responds to the changing macro environment. EUR/GBP spot rate. This scenario is particularly relevant for fx & dollar because changes in Leading Index for US directly influence the macro environment for EUR/GBP. Investors should monitor both the trigger condition and EUR/GBP's response to position accordingly.
When the Leading Economic Index Turns Negative, CAD/USD typically responds to the changing macro environment. Canadian dollar per US dollar. This scenario is particularly relevant for fx & dollar because changes in Leading Index for US directly influence the macro environment for CAD/USD. Investors should monitor both the trigger condition and CAD/USD's response to position accordingly.
When the Leading Economic Index Turns Negative, MXN/USD typically responds to the changing macro environment. Mexican peso per US dollar. This scenario is particularly relevant for fx & dollar because changes in Leading Index for US directly influence the macro environment for MXN/USD. Investors should monitor both the trigger condition and MXN/USD's response to position accordingly.
Frequently Asked Questions
What triggers the "the Leading Economic Index Turns Negative" scenario?▾
The scenario activates when six-month change turns negative 2% or worse. The trigger metric and its current reading are shown on this page, so the live state of the scenario is always visible rather than abstract. Convex tracks this trigger continuously and flags crossings within hours.
Which assets are most affected when this scenario unfolds?▾
The Market Impact section lists the full asset-by-asset response, but the primary affected assets include: US Equities (S&P 500), Treasury Bonds (TLT), Small Caps (IWM), Cyclical Sectors. Each asset has historically shown a characteristic pattern of response that is described in detail on the per-asset deep-dive pages linked below.
How often has this scenario played out historically?▾
USSLIND six-month changes below -2% have preceded each recession since 1970. The 1973-1975 recession saw the LEI turn negative in late 1973 with peak six-month declines of -5%. The 1980-1982 double-dip produced two separate LEI collapses. The 2001 recession was preceded by LEI turning negative in early 2000. The 2008 recession showed LEI turning negative in December 2007, the exact month the recession began. The 2022-2023 period saw LEI turn negative for over 20 consecutive months without triggering a formal recession, the longest such streak on record and a reason some economists questioned the indicator's continuing reliability in the post-COVID economy.
What should I watch for next?▾
The most important signals to track while this scenario is active: Six-month LEI change below negative 3% annualized; Credit spreads widening above 500 bps confirming the LEI signal. The full list is on this page under "What to Watch For." These signals are the ones that historically preceded the scenario either resolving or accelerating.
How should I interpret the current state of this scenario?▾
Track USSLIND and its six-month annualized change monthly. Compare against the Conference Board LEI and the Convex Recession Index for convergence or divergence. LEI weakness alongside tightening credit spreads is the most concerning combination, while LEI weakness with credit spreads still tight often produces the false-signal scenarios (2022-2023).
Is this a prediction or a conditional analysis?▾
This is conditional analysis, not a prediction that the scenario will happen. Convex describes what typically follows once the trigger fires and shows how close or far the current data is from that trigger. The page is informational; it does not constitute financial advice.
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This content is educational and for informational purposes only. It does not constitute financial advice. Historical patterns do not guarantee future results. Data sourced from FRED, market feeds, and public economic releases.