Watch For U.S. Recession, Zero Interest Rates In China Next Year, Citi Says

[Purveyor]

Source: Reuters

Reuters By Jamie McGeever | Reuters

By Jamie McGeever

LONDON (Reuters) - The outlook for the global economy next year is darkening, with a U.S. recession and China becoming the first major emerging market to slash interest rates to zero both potential scenarios, according to Citi.

As the U.S. economy enters its seventh year of expansion following the 2008-09 crisis, the probability of recession will reach 65 percent, Citi's rates strategists wrote in their 2016 outlook published late on Tuesday. A rapid flattening of the bond yield curve towards inversion would be an key warning sign.

"The cumulative probability of U.S. recession reaches 65 percent next year," Citi's rates strategists wrote in their 2016 outlook published late on Tuesday. "Curve inversion will likely come more quickly than the consensus thinks."

Normally, short-dated yields such as two-year yields are lower than longer-dated ones like 10-year yields, as investors demand a premium for taking on risk several years into the future. The curve has inverted before each of the last five U.S. recessions since the mid-1970s.

Read more: https://ca.news.yahoo.com/watch-u-recession-zero-interest-rates-china-next-123111939--sector.html

[bulloney]

1. Thom Hartman has been saying as much regarding a U.S. recession in 2016.

[Duval]

3. He also mentioned that the Feds

may increase the interest rate, and that would bad. Cool name, bulloney!!

[Wellstone ruled]

2. Some what agree.

This can be averted if our so called Congress acts accordingly. A major Infrastructure Bill will suck up most of the loose Capital floating around the Globe. But we know how that is just a dream. Got to worry about them Muslim Terrorists,you know.

[Hortensis]

4. Muslims are nothing to the Democratic Party terrorist

plan to take the White House, and maybe the Senate, congressional seats, governorships, mayoral and county commission seats, etc. No, the GOP Congress will fight for just as good a recession as they can manage for 2016.

After all, they've spent 7 years fighting recovery from the 2008 Great Recession as a tactic to grow power and retake the White House.

[AZ Progressive]

5. The GOP would love what happened to Bush in 2008 to happen to Obama in 2016

Ruin Obama's image and make the opposition party to take over the presidency.

[Hortensis]

7. Agree. And since it'd take something like a

recession or big terrorist attack to win them the White House, I'm guessing the GOP leadership is praying for both. Look at Nixon's sabotage of the Vietnam peace talks.

Especially since all those conservative followers react to insecurity with increased obedience to authority. They'd be so relieved to have their own leadership, big strong Trump maybe, to "take charge" that it'd probably take them another 8 years to become angry all over again at being continuously screwed over.

[hibbing]

6. Invest in the MIC and you'll do fine

That and gun manufacturers if any of their stock is public.


Peace

[Triana]

8. The Tealiban will use the recession as a tool to say:

"See Democrats failed, elect us and we'll fix everything! Democrats can't run an economy!"

[Purveyor]

9. It will be a problem if it happens, indeed. eom