David Rosenberg says the Fed has sown the seeds for the next recession.
Strategists athave also described the real global monetary base — which fell by 2.2% last year — as"a threat to risk assets." They forecast that it will contract by another 1.6% year-on-year in 2019.
The chart below, published in a recent note, puts this trend into wider perspective by examining its three-month moving average. On this scale, the monetary base has shrunk just five times since the 1980s — and each time preceded or coincided with an OECD-defined global slowdown.
But that was a different era. The Fed and other global central banks were still very much enacting accommodative policies and juicing financial assets with liquidity. "They clearly don't want to be seen as supporting asset markets any longer — this goes double for the Federal Reserve," RosenbergHe continued:"At some point, the monetary authorities will have no choice but to ease, but it may take more concrete signposts that recession risks have materially risen."
In his view, many of those risks — including the slowing pace of global growth — are already flashing red.simply click here to claim your deal and get access to all exclusive Business Insider PRIME content.The investment chief of the bull market's best-performing fund shares the secrets of his success — and breaks down the stocks driving his dominant performance
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