Chance of U.S. downturn 30% in next 12 months, a 9 year high
Bond giant overseeing $1.7 trillion issues economic outlook
U.S. growth will slow and the risks of a recession climb in 2019 as the near-decade-long economic cycle ages, according to Pacific Investment Management Co.
“The probability of a U.S. recession over the next 12 months has risen to about 30 percent recently and is thus higher than at any point in this nine-year-old expansion,” Pimco economist Joachim Fels and Andrew Balls, global fixed-income chief investment officer, wrote in an outlook released Thursday. “Even so, the models are flashing orange rather than red.”
The note, “Synching Lower,” is based on discussions at a forum this month of economists and portfolio managers to guide investments for the coming six to 12 months. Newport Beach, California-based Pimco manages about $1.7 trillion.
Pimco Chief Investment Officer Dan Ivascyn, in a Bloomberg Radio interview Thursday, warned that next year will be as rocky as this one.