Recession risk "coin flip" over the next year - PIMCO

investing.com:

By Dhara Ranasinghe and Chiara Elisei

LONDON (Reuters) — The risk of a global recession over the next 12 to 18 months is close to a «coin flip» and financial markets are underestimating the chances of one in the United States, executives at bond giant PIMCO said on Wednesday.

«We've become a bit more constructive, given the better economic numbers,» Daniel Ivascyn, group chief investment officer at the $1.79 trillion asset manager told a media event in London.

He was referring to strong data prints in the U.S. recently which have prompted markets to scale back expectations for rate cuts from the U.S. Federal Reserve over the next 12 months.

Ivascyn said PIMCO is the most interested it has been in interest rate exposure in years, and has also been adding to its position in inflation-linked bonds. Deficit and debt levels were a concern, he added.

Speaking at the same event, Richard Clarida, former Fed vice chair and a global economic advisor to PIMCO, said the odds of a moderate U.S. recession are higher than markets are pricing in.

In Europe, the asset manager expects a rate hike at Thursday's European central bank meeting and next week from the Bank of England, with the latter's November decision more uncertain.

On China, where slowing demand and a deepening property crisis have exacerbated economic slowdown, portfolio manager Pramol Dhawan said PIMCO was looking for additional stimulus to support the economy and had not yet seen a «credible solution».

Stimulus measures so far were «nothing really with a big bang effect to get the economy going,» he added.

Beijing has rolled out a series of support measures but investors have so far been disappointed. PIMCO expects more rate cuts and liquidity injections to