UBS puts the recession probability at 93%

UBS has sounded an alarm over the U.S. economy, saying its proprietary model places the risk of recession at 93% based on “hard data” covering May through July 2025. While the bank stopped short of making an official recession call, it described the probability as “historically worrying” and pointed to a meaningful risk of stagnation ahead.

The model relies on hard metrics—such as jobs, personal income, consumer spending, and industrial production—rather than sentiment surveys, and shows notable weakness across those indicators. UBS likened the situation to a medical diagnosis: “stable but high risk,” comparable to someone living with high blood pressure.

Supporting signals also point to mounting stress. UBS’s credit market gauge shows recession probability climbing to 41%, nearly double where it stood at the start of the year. Meanwhile, the yield curve inversion has deepened to 23%, underscoring pressures within bond markets.

Other economists have issued similar warnings, with some noting that sluggish growth, labor softness, and tariff-driven inflation have left the U.S. economy increasingly vulnerable. UBS’s base case now envisions not a sudden collapse but an extended period of weak, “soggy” growth that could leave policymakers with fewer tools to respond if conditions worsen further.