US Recession Risk Is Receding as We Move Into 2026

The US economy has been in something of a Through the Looking Glass era for the past few years: Nothing is as it seems. In terms of inflation and the labor market, there’s been a curious disconnect between people’s lived experience and the data. At several points, tried-and-true recession indicators have flashed red. The legendary yield curve (which tracks US Treasury Bond yields and has correctly predicted every downturn since the 1970s) inverted in 2022, and the Sahm rule (a formula based on the unemployment rate) was triggered in 2024. But each time the economy has ducked and weaved past obstacle after obstacle, like ...