US economy staring at recession? Global investment bank puts risk at 93%. Here's why

The US economy could be staring at a recession by the end of 2025 despite some numbers still looking good, according to UBS, the global investment bank. There is a 93% chance of US going into a recession based on “hard data” from May to July 2025. The situation has, however, been told to be “stable but elevated” in terms of the risk.

'Historically worrying levels”, is how the UBS described the current situation of the US economy. It pointed towards the inverted yield curve, which shows stress in bond markets. Currently at 23 per cent, it seems steady but increasingly higher than 2025. Another reason for the prediction is the stress in credit markets that puts the probability of recession due to credit metrics at 41 per cent.

UBS further said that the economy is soggy but not collapsing. It pointed out that the US economy recovered at the end of 2024 but slipped again in February 2025 and has remained stagnant since then, not declining sharply.

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Despite its track record of identifying recession in the past, the global investment bank has not officially predicted a recession as according to them economic indicators, like jobs or production, are not collapsing below trend, which is a sign of economic collapse.

So, according to UBS, the U.S. economy is stuck in slow growth or mild contraction, not a sudden crash. Rather, the the global investment bank expects 2025 to observe “soggy growth”, improving only marginally in 2026. The bank took everything into account like hard data, yield curve, and credit stress before getting to the conclusion of a 52% overall recession probability in July, up from 37% in January. Historically this is an indicator of recession.