A recession is looming, and that means investors will encounter more uncertainty about what could happen, top economist, Mohamed El-Erian has said.
Markets are keeping a close eye on an imminent economic downturn after a basket of warnings from Wall Street analysts. At the same time, the International Monetary Fund has said it expects a recession to hit one-third of the world this year.
“In this new year, recession, actual and feared, has joined inflation in the driver seat of the global economy and is likely to displace it,” El-Erian said in a Financial Times opinion column Monday.
That would typically cause more market turbulence — something BlackRock strategists have also forecast, as they warned central bankers are unlikely to come in for rescue like they used too.
“It’s an evolution that makes the global economy and investment portfolios subject to a wider range of potential outcomes — something that a growing number of bond investors seem to realize more than many equity counterparts,” El-Erian said.
