Equity markets have gone up so quickly that they’re highly vulnerable to a pullback if the US economy slips into even a mild recession, according to Royal Bank of Canada’s fund management arm.
The odds of such a downturn are still about 70%, says the chief economist of RBC Global Asset Management, despite increasingly-frequent predictions of a soft landing. Those calls are based on data that show inflation is cooling, suggesting the Federal Reserve and other central banks will soon be able to lower interest rates even as the economy continues to expand.
