Tracking Recession Probabilities on the FRED Macro System

We’re revisiting the FRED blog this month, the official economic education publication hosted by the Federal Reserve Bank of St. Louis. There seems to be a new dataset in it that’s worth discussing with our Chief Equity Strategist and Economist, John Blank.

1. John, I’m referring to A new dataset in FRED providing the monthly probability the US economy is in recession. The latest data, for August 2026, shows that probability was 0.08%. How should this be interpreted?

2. Where does this data actually come from? Which indicators does it track?

3. So, to clarify, the current probability of an economic recession here, based on this dataset, is low?

4. Do you agree with this probability assessment? Does this change your economic outlook?

5. What risk factors might cause the probability to rise?

6. Does this FRED data affect FOMC policy?

7. What would a recession in 2026 look like? More stagflation rather than anything worse?

8. Now let’s look at three very large market cap Zacks #1 (STRONG BUY) stocks. Two with a Zacks Value score of F, and one with a Zacks Value score of A. Texas Instruments TXN, Shopify SHOP and Total Energies TTE.

Our Chief Equity Strategist and Economist, John Blank, on the probability of recession. With John, I’m Terry Ruffolo.

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This article originally published on Zacks Investment Research (zacks.com).

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