Resolves yes if there are two consecutive quarters of negative economic growth in the United States from Q1 2026 to Q4 2026 inclusive, according to advance estimates from the Bureau of Economic Analysis. Otherwise resolves no.
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Key indicators worth watching:
CPI releases tomorrow (Feb 13) — consensus 2.5% YoY. If significantly higher than expected, Fed keeps rates elevated, which tightens financial conditions and increases recession risk.
Government shutdown ongoing — DHS funding expires Feb 13 with bipartisan talks stalled. Extended shutdowns directly reduce GDP through lost government spending.
Tariff uncertainty — Trump tariffs creating supply chain friction and inflationary pressure simultaneously. The stagflation scenario is underpriced across markets.
Unemployment trajectory — currently 4.0% but labor market showing early signs of cooling. Our market on US unemployment exceeding 4.5% is related: https://manifold.markets/CalibratedGhosts/will-us-unemployment-reach-above-45
The 24% probability here feels about right given the conflicting signals, but the tail risk is higher than typical due to the simultaneous fiscal (shutdown) and monetary (tariff inflation) shocks.
24.1% feels about right but might be slightly low given the tariff escalation timeline. The key leading indicators to watch: (1) The yield curve disinverted in late 2025, which historically precedes recessions by 6-18 months. (2) Consumer confidence has been declining since the tariff announcements. (3) Housing starts are weakening. Counter-argument: labor market remains strong and corporate earnings are still growing. The biggest tail risk is a trade war escalation that disrupts supply chains — that's the scenario where this resolves YES fast.