The Fed: Here’s the new recession indicator presented to Fed officials

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Jerome Powell and friends have a new recession model.

Federal Reserve policy makers were presented with a new recession indicator, according to minutes released Thursday.

The discussion comes as the flattening of the so-called yield curve has raised fears about the health of the economy, since an inverted curve is often a leading indicator of a downturn.

Read Caroline Baum:To invert or not to invert? That is the Fed’s question

Minutes of the two-day meeting ending June 13 revealed this discussion:

“Participants also discussed a staff presentation of an indicator of the likelihood of recession based on the spread between the current level of the federal funds rate and the expected federal funds rate several quarters ahead derived from futures market prices.

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