Recession fears in the financial markets are mounting, and we have raised the odds of recession from around 10 – 15% at the start of the year to approximately 30% today. The economic data — notably the Conference Board’s Leading Economic Index (LEI) — put the odds of a recession at only 10 – 15%, but the rocky start to the year in financial markets has raised the likelihood of a policy mistake (monetary, fiscal, and/or currency), pushing recession odds higher (discussed in today’s Weekly Market Commentary “What a Non-Recessionary Bear Might Look Like”). With their year-to-date performance, many financial markets have already priced in a recession. While no serious market participant uses only one indicator to make a recession call during times of uncertainty (we look at a broad range of indicators: economic, market, and sentiment based, to gauge the likelihood of a recession occurring), many investors want to focus on the most timely indicators, which are market based. But while market data (equity, fixed income, and commodities) can provide minute-by-minute updates on recession odds, markets often overreact, making it difficult sometimes to separate out the signal from the noise.