'The storm signals are flying': Evercore founder says the US is barreling towards a recession

• Evercore founder Roger Altman says the odds of a recession are rising, he told CNBC on Monday.
• Altman breaks down which indicators he's using to gauge economic health. 
• "We could be heading into that kind of economic softness, and that might affect credit quality and banking health."

Roger Altman, the founder and chairman of Evercore, said the odds of the US going into a recession continue to rise as the Federal Reserve hikes interest rates and markets react to global banking turmoil. 

"The storm signals are flying on that. I think you have to say to yourself the risks of recession have risen a lot. Partly because open market financial conditions have tightened," Altman told CNBC Monday, referring, in part, to the central bank's rate hikes. 

Although the banking sector is under tremendous stress, per Altman, contagion from the failure of Silicon Valley Bank is largely contained. However, the probability that US economy is barreling towards a recession continues to go up.

The Evercore exec is eyeing indicators such as a "sharply" inverted yield curve, which is when long-term interest rates are less than short-term ones. This is a common recession signal because it shows that bond investors may be moving money from short to long-term bonds, which reflects expectations for a decline in interest rates in the long term.

Altman also pointed to the federal fund futures contract, which shows market expectations for monetary policies. There's a "huge gap," Altman said, in where the market see rates going versus where the Fed does.

"[This] tells you that the market, at the moment, thinks that the economy will be so weak at year-end that the Fed will have to be cutting [rates]," he added, noting that the index of leading indicators and money supply data support his view. "We could be heading into that kind of economic softness, and that might affect credit quality and banking health."