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Originally Posted by bizaro86
The 10-2 yield curve is inverted by 38 bps in the US. That, combined with the Fed steeply raising rates and the Treasury running a much more balanced (==less stimulative) fiscal position makes avoiding a recession pretty unlikely.
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Probably, yeah. Though on average it seems to take about 1.5 years from the start of a yield curve inversion to the beginning of a recession and we're only a month or so into the 10-2 inversion. So I don't know that it's necessarily a good predictor of whether the US is currently in a recession.
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Really the most likely way the US avoids an "official" recession is by political power leaning on the NBER to avoid declaring one. More realistically, they will just wait to declare until their declaration is irrelevant - a course of action which is quite common for the group. NBER recession definitions are interesting in retrospect for historical purposes, but not especially useful as a definition in the moment.
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If unemployment stays low and GDP starts increasing again, they're not going to have to lean on the NBER to declare anything because the current situation almost surely won't meet their standard for a recession.
And while the NBER's official declaration is certainly more backwards looking, I don't think there's a strong case to be made right now that the US is already months into a recession based on the data. Employment levels, industrial production, and manufacturing have all still been increasing through the first 7 months of 2022. Without fail, those things all begin to drop soon after the beginning of a recession.