- The global economy is “highly likely” to go into a recession if the U.S. and China don’t reach a trade deal within three months, said Moody’s Analytics Chief Economist Mark Zandi.
- Business sentiment has been hurt by the trade war and companies are now “on edge,” Zandi said.
- The economist also said the probability of a no-deal Brexit is “uncomfortably high” and that’s a risk that could send Europe into a recession.
His prediction was based on current “extraordinarily fragile” business sentiment that was a result of a protracted tariff fight between the two largest economies in the world that started last year. The U.S. and China are now negotiating a deal, with representatives from both countries expected to meet in Washington this week.
“Business sentiment across the globe is extraordinarily fragile,” the economist told CNBC’s “Squawk Box” on Tuesday. He added that a survey conducted by Moody’s recently showed that confidence among companies was at its weakest since the end of the financial crisis a decade ago.
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