Modeling by Goldman Sachs Group and JPMorgan shows that the market-implied probability of a recession has risen sharply, based on signals from the US bond market and the performance of stocks that are, to a lesser extent, extremely sensitive to the ups and downs of the business cycle. The stock and bond markets now see a 41 per cent chance of a US recession, up from 29 per cent in April, according to Goldman Sachs. A similar model by JPMorgan calculates that the probability of a recession jumped from 20 per cent at the end of March to 31 per cent as a result of a sharp repricing of Treasuries. Nikolaos Panigirtzoglou, strategist at JPMorgan, said the recession risk in the bank's model reflected the magnitude of interest rate cuts that the market has priced in since last month's jobs report showed slower job growth.