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The New York Fed's Recession Probability model indicates that a "Powell recession" in 2023 is a certainty, according to the research firm DataTrek.

The model measures the difference between yields on the 3-month and 10-year Treasury – similar to the 2-10 Treasury curve, which is a famous indicator of a recession when the curve is inverted.

Analysts have called the 3-10 Treasury curve a "more accurate" predictor, and Federal Reserve Chairman Jerome Powell has previously called it his preferred recession warning.

It's now signaling a 38% probability of a recession, according to the NY Fed, but the indicator is really sounding alarms for a near-100% chance of a recession, given how reliable it is, DataTrek co-founder Nicholas Colas said in a note on Wednesday.

"It is clearly saying high short term interest rates are going to cause a recession in the next 12 months. Moreover, these odds are very likely to increase," Colas said, referring to the expected 50-basis-point hike at next week's Federal Open Markets Committee meeting.

Although that's a slowdown from the recent streak of 75-basis-point hikes, the probability model implies that markets already see rates as too restrictive, meaning there could be a Fed-induced recession, or as Colas calls it, a "Powell recession."

"Chair Powell will almost certainly have to answer a question about the likelihood of a recession at his post-FOMC press conference next week. He might cite the NY Fed's model and say '38 percent.' But, based on the model's history, the real answer is 'close to 100 percent,'" Colas warned.

The fear of a recession has wreaked havoc on stocks all year, with the S&P 500 dipping 17% from levels in January amid rising inflation and aggressive Fed rate hikes. The central bank has raised rates by 375 basis points so far this year to rein in high prices, a level that risks overtightening the economy, market commentators say.