The Federal Reserve yesterday raised its target range for the Fed funds rate by 25 basis points to 0.25% to 0.50%–the first hike in nine years. The reasoning, as the Fed explained, is the “considerable improvement in labor market conditions this year” and the outlook for inflation “will rise, over the medium term, to its 2 percent objective.” But the economic data is mixed, as yesterday’s sharply divergent US macro updates remind. Housing starts rebounded smartly in November, but industrial production tumbled 0.6% last month—the biggest monthly decline in more than three years. As a result, output is now contracting by more than 1% a year.

The obvious question: does the resumption of monetary tightening coincide with the start of a new recession? No, based on the numbers available at the moment. But the latest run of data looks worrisome… again. The labor market betrays no sign of trouble, and that may be enough to keep the business cycle in the positive column. There are other encouraging signs as well, including robust 4%-plus year-over-year growth in real personal income ex-transfer receipts. But the latest dip in the Philly Fed’s ADS Index—a quasi real-time business-cycle benchmark—comes at an awkward moment. Indeed, the symbolism of a rate hike at a point when the US economy appears to be stumbling doesn’t inspire much confidence.

After yesterday’s round of macro updates, the ADS Index was revised down to a weak -0.58. That’s still above the tipping point of -0.80 that marks the starts of recessions, based on the San Francisco Fed’s analysis (“Diagnosing Recessions”). Nonetheless, the latest slide in this index in the current climate raises new questions about the wisdom of the latest policy change.

Translating the ADS data into probability estimates of recession risk via a probit model reveals a sharp jump in macro risk after yesterday’s updates. The implied probability that an NBER-defined recession for the US has started this month jumped to roughly 20%–the highest since early 2013. That’s still low enough to reserve judgment about what comes next. Until we see confirmation in other business cycle indicators and economic data in the days ahead it’s fair to stay that the case for modest growth in the near term is still a reasonable working assumption.