According to The Kobeissi Letter, the 1-year US recession probability, as priced by the S&P 500 earnings yield and the BBB-rated corporate bond spread, has surged to 60%, marking the highest level since 2022. Over the past several weeks, this probability has tripled, indicating increasing investor concern about a potential economic downturn. Historically, such high recession probabilities have preceded significant market corrections, which is highly relevant for traders managing equity and crypto portfolios. Source: The Kobeissi Letter on Twitter, April 26, 2025.

According to The Kobeissi Letter, 1-year US recession odds derived from the S&P 500 earnings yield and BBB-rated corporate bond spreads have surged to 60%, marking the highest level since 2022 (source: The Kobeissi Letter, April 26, 2025). Over the past few weeks, this probability has tripled, signaling increased risk-off sentiment among traders. Historically, similar spikes in recession probabilities have led to heightened volatility in equity and credit markets, prompting traders to adjust portfolios towards defensive assets and monitor credit spreads closely for further market signals.