U.S.-China trade tensions have escalated, echoing our midyear outlook protectionist push theme, and bond yields have fallen to new lows. We do not see a near-term recession, with no clear signs of financial vulnerabilities and central banks helping to extend the cycle. Yet, the protectionist push has been stronger than we expected, raising the risk of accidents. This has potential to challenge our modestly pro-risk stance.
Chart of the week
BlackRock global trade tensions BGRI, 2006-2019
Source: BlackRock Investment Institute, with data from Refinitiv Datastream, August 2019. Notes: We identify specific words related to geopolitical