One economist has a sobering prediction for investors who are feeling euphoric over the economy: There’s a 60% chance of a global recession in the near future.
“While the market at large sees less than a 10% chance of recession, we at Saxo – together with our friends at South Africa’s Nedbank – see more than a 60% chance,” Steen Jakobsen, chief economist at Copenhagen-based Saxo Bank, wrote in a recent note seen by CNBC. Jakobsen added this potential recession is “more likely than not” to occur in the next 12 to 18 months.
Jakobsen attributes this slowdown in the market to several things. First, investors have been losing faith in President Donald Trump’s economic agenda thanks in part to the GOP’s failed health care bill. Additionally, borrowing levels seem set to fall in Europe and China, with Jakobsen noting that “China is on total standstill.”