Bloomberg: “Shades of 2007 as Volatility Markets Ignore U.S. Recession Risk”

via Bloomberg:

The renewed rally in U.S. equities has left volatility markets showing little concern that the good times will end any time soon. Recession models beg to differ.

Wells Fargo’s model — which draws on the spread between three-month and 10-year Treasury yields as well as economic figures — shows chances of a U.S. recession within 12 months jumped in December and climbed to just above 40 percent in January.