World economy edges closer to recession as trade fears spread
The escalating trade war between the U.S. and China is nudging the world economy toward its first recession in a decade, with investors demanding politicians and central bankers act fast to change course.
In the U.S. alone, the recession risk is “much higher than it needs to be and much higher than it was two months ago,” Lawrence Summers, a former U.S. Treasury secretary and a White House economic adviser during the last downturn, told Bloomberg Television. “You can often play with fire and not have anything untoward happen, but if you do it too much you eventually get burned.”
Summers, who teaches at Harvard University, still sees a less than 50/50 chance that the U.S. enters a recession in the next 12 months. Investors are much more bearish: A closely watched segment of the yield curve, the difference between 10-year and three-month notes, inverted the most since 2007, indicating bets on protracted weakness.
New Zealand’s central bank on Wednesday stunned investors by dropping its benchmark rate by 50 basis points, double the expected reduction and sending the kiwi tumbling. Thailand also surprised, cutting by 25 basis points. India’s central bank lowered its rate by an unconventional 35 basis points.
https://www.msn.com/en-us/money/markets/world-economy-edges-closer-to-recession-as-trade-fears-spread/ar-AAFt7Ji?li=BBnbfcN
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