The Federal Reserve lowered its 2022 GDP forecast at its March meeting. The central bank expects 2.8% growth this year, down from the 4% forecast it provided in December.
Fed indicator doesn't show recession on horizon
While first-quarter GDP fell by 1.4%, one of the Fed's leading indicators, the yield curve, shows only a small probability of a recession. Based on the spread between the 10-year Treasury yield and the three-month yield, the Fed estimates there is about a 6% probability of a recession in the next 12 to 18 months. At the start of the year, the yield curve indicator showed a 12% chance that the U.S. economy would fall into a slump.