The idea of the US and China engaging in talks with no deal on the table has Moody`s suggesting that a global recession is possible. This is no surprise as the global economy is under some pressure mow with the probability of a slow-down only increasing.
Moodys Analytical Chief Economist seems to think that these talks could have negative impact – his name is Mr Mark Zandi. His view is based on “extraordinary fragile” business sentiment that was brought on by protracted tariffs and a verbal battle on trade. Mr Zandi is now saying that if there is not a trade deal done in 3 months, the global economy could start to falter and fall into a period of weakness.
In addition to the US – China trade talks that could trigger a faith crisis, and note the the does say that a loss of faith will cause a recession, Mr Zandi says that the issue with no definitive decision on Brexit has also had impact. If we have a no deal on Brexit than the UK and EU will both fall into recession.
This view seems to be more common on the street than just 2 months ago. US, Japan, China and the EU are all seeing some economic weakness lately. He goes on to say that a weaker Europe would be a double negative for Emerging Markets – fewer exports and a stronger US dollar.