The Research Department at BBVA affirms that its model suggests there is more than 70% probability of a recession within the next two years and they see the “dovish” response from the Federal Reserve having the potential to negate downside risks in short-term.
Key Quotes:
“Shadow banking, business debt and risk appetite represent major red flags.”
“Dovish Fed response has potential to negate downside risks in short-term.”
“Trade tensions weigh on business expectations and market sentiment.”
“Economic fundamentals for households and financial institutions remain solid”
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