David Karp/AP

A probability model used by the New York Fed to calculate the odds of a recession in the next 12 months just hit 32%, the highest level since 2009.

A reading above 30% has preceded all recent recessions.

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A key recession tracker just hit its highest level since 2009, sending a signal that an economic downturn may be looming on the horizon.

The New York Federal Reserve's probability model, which predicts the probability of a US recession in the next 12 months, delivered a reading of 32.9% for June.

That's could mean tough times ahead, considering the measure has breached the 30% threshold before every recession since 1960. It sat at a precarious 28% in May.

This development comes on the heels of the US's 10-year economic expansion recently becoming the longest on record. While duration is not what ends expansions, lengthy ones can make investors nervous. Recession watch has been on high alert, especially since the yield curve between the 10-year and 3-month Treasurys inverted in March, and then again in May.

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To calculate recession probability, the New York Fed's tracker uses treasury spreads, specifically the difference between the 10-year and 3-month Treasury rates. A negative spread between the two has preceded all post-war downturns, and it's been negative since May.

New York Fed

To be sure, many analysts argue that the New York Fed's reading is a single component of a more complex recession forecasting system. While US economic data has been rocky, the latest jobs report crushed economists expectations, a sign that the economic recovery is doing just fine.

Pessimists of the New York Fed's tracker also note that the lead time isn't precise, and the higher the probability isn't necessarily more cause for concern.

"In front of the Great Recession (2008), the probability never got above 40%," wrote Thomas Lee of Fundstrat in a note to clients. "And yet, the probability could rise to 100% and could take another 2 years."

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