There are certain words you don’t want to hear in a medical checkup or in an investment bank’s recession outlook: “stable but elevated.” It’s a phrase that could refer to blood pressure, even risk of a heart attack, a favorite metaphor of hedge fund legend Ray Dalio, or in UBS’s evaluation, risk of a recession.
The bank found that from May through July, the “hard data” from the U.S. economy has shown an elevated risk level, standing at a probability of 93% most recently. This sits at “historically worrying levels,” UBS says, given this signal’s track record of identifying turning points using data from the National Bureau of Economic Research.
