US Recession Outlook

As of early September 2025, recession fears in the US have increased notably. The probability of a US recession in 2025 has risen to approximately 43%, the highest level since November of the previous year. This is driven by a significant decline in the Conference Board’s Leading Economic Index (LEI), which has dropped over 4.1% in six months, signaling broad economic weakness. Consumer confidence is low, with 71% of respondents in August believing a recession is likely within the next year.

Political risks, including concerns about Federal Reserve independence following the dismissal of Fed Governor Lisa Cook, have added to market uncertainty. These factors have increased demand for safe-haven assets such as gold & silver, while putting pressure on the US dollar.

S&P 500 (SPX500/USD) Market Status

The S&P 500 index recently experienced a pullback after reaching a high near 6523.00, closing around 6467. This decline is viewed as a natural correction following a strong rally, especially in the technology sector which faced some profit-taking. The index remains above its 50-day moving average (~6350), indicating the pullback is more a market digestion than a reversal.

Technical analysis shows the S&P 500 testing key support levels between 6437.7 & 6413 (daily pivots), with resistance levels at 6498.5 & above. The Relative Strength Index (RSI) is around 65-70, showing bullish momentum but not yet overbought. The market is cautious ahead of key economic data releases, including the upcoming US jobs report & inflation data.

Federal Reserve & Inflation Context

Inflation remains a key concern, with core Personal Consumption Expenditures (PCE) inflation expected to rise to 2.9%, the highest since February. This persistent inflation may limit the Federal Reserve's willingness to implement multiple rate cuts this year, although a 25-basis-point cut in September is still widely priced in by markets.

The US GDP growth was revised upward to 3.3% for Q2 2025, showing economic resilience despite recession fears. However, labor market data indicates slowing job growth, which may influence Fed policy towards easing in the near term.

Summary

In summary, the US economy is showing mixed signals as of September 1, 2025. Recession fears are elevated, supported by leading economic indicators & consumer sentiment. The S&P 500 is undergoing a healthy correction but remains technically supported & above key moving averages. Inflation data & upcoming employment reports will be critical in shaping the Federal Reserve's policy decisions & market direction in the near term.