CREDIT RECESSION PROBABILITY DASHBOARD

12‑Month Outlook — Serious Money Ohio Edition

Purpose: Identify whether the U.S. is entering a credit‑driven recession rather than a normal economic slowdown.

Scoring:

• Green — 🟢 Low risk

• Yellow — 🟡 Rising risk

• Red — 🛑 High risk / Credit stress

(Current readings reflect the latest publicly available data as of April 2026.)

1. Bank Lending Standards (SLOOS)

Current reading: ~12% net tightening on commercial & industrial loans

Score: 🟡 Rising risk

Why it matters: When banks tighten >20%, recessions often follow within 6–12 months.

2. Corporate Credit Spreads

Investment Grade (IG): ~165 bps

High Yield (HY): ~480 bps

Score: 🟡 Moderate widening

Why it matters: Spreads widen when lenders demand more compensation for risk.

3. High‑Yield Default Rates

Current reading: ~3.8%

Score: 🟡 Rising but not stressed

Why it matters: Defaults >5% historically coincide with credit‑driven downturns.

4. Bank Lending Volumes (C&I Loans)

Current reading: –1% YoY

Score: 🟡 Soft contraction

Why it matters: Negative lending growth is a hallmark of credit contraction.

5. Commercial Real Estate (CRE) Delinquencies

Current reading: ~4.2%

Score: 🟡 Elevated but not crisis-level

Why it matters: CRE is the most credit‑sensitive sector; stress spills into banks.

6. Consumer Credit Stress

Credit card delinquencies: Up

Auto loan delinquencies: Up, especially subprime

Score: 🟡 Noticeable deterioration

Why it matters: Consumers are 70% of GDP; subprime stress is an early warning.

7. Treasury Yield Curve (3m–10y)

Current reading: Normal/slightly positive

Score: 🟢 Low Risk

Why it matters: A positive curve supports bank profitability and reduces credit-recession odds.

This shift meaningfully lowers overall recession probability.

Overall 12‑Month Credit Recession Probability

Moderate Risk (30–45%)

Why:

• No single indicator is in crisis territory

• But six are flashing Yellow 🟡🟡🟡🟡🟡🟡

• Lending standards, spreads, and consumer stress are all trending the wrong direction

• The yield curve remains the one strong positive 🟢