The American multinational investment bank and financial services company, Morgan Stanley has predicted that the economies globally are showing signs of acute weakness and the next stage could be a worldwide recession. In nine months from now, the world may have gone into a full-fledged recession, says the report.
Escalation in trade tension between the two largest economies -- US and China -- is the key which pushing the world economy towards a recession.
The bond yield curve is the other warning signal. The yield curve has typically inverted before recession and it is now nearly similar to what was seen ahead of the 2008 financial crises.
Morgan Stanley believes that if the trade war between US and China further tightens, tariffs on all goods imported from China will go up to another 25 per cent. This will lead to the global economy entering recession in three quarters.