Vantage Point: Economic Outlook  

Why recession is now 'almost 100 per cent certain'

While the price of longer-dated bonds has risen a little in recent weeks, Hodges said the prices of those assets does not yet reflect a market view that recession is coming, because “the market is waiting for the Federal Reserve to announce that interest rates there have reached their peak, that there won’t be any more rises.”

He believes that equities have “further to fall”, as present valuations do not reflect the looming potential for recession.

Thompson’s view is that the present “consensus” view in markets around the profitability of companies this year is “too optimistic” and will not be borne out by reality.”  

david.thorpe@ft.com