UBS looking for a modest recession, rolling across segments, unlikely before year end

A note from UBS’ America’s asset allocation folks says not expect a ‘standard’ recession:

  • the manufacturing sector has already mildly contracted and could start recovering by year-end
  • the economy may instead experience rolling recessions across different segments

Factors that are pushing back a recession onset include:

  • central bank monetary policy is not yet restrictive enough to cause a contraction
  • fiscal policy is marginally expansionary and indeed is fuelling investment

UBS say that:

  • The net result could be a very modest recession overall with unusually low job losses, an outcome very similar to a soft landing

As for timing:

  • Such a recession is unlikely to start long before the end of the year


This article was written by Eamonn Sheridan at Source