Morning Meeting: Global Recession Prospects

Andrew Sheets from Morgan Stanley discusses the global economic outlook, highlighting increased recession risks and interest rate forecasts. He explains the impact of international rate comparisons and advises reducing equity exposure while investing in Treasurys. Sheets also discusses the Federal Reserve's slower rate hikes and their implications for the FX market, maintaining a bullish stance on the dollar. The discussion concludes with insights into emerging market dynamics and the continuation of the dollar bull market.

What is one reason Andrew Sheets gives for the potential drop in US 10-year rates?

• Increased US economic growth

• Lower international rates compared to 2012

• A booming stock market

• Higher rates in other countries

Why does Andrew Sheets advise reducing equity exposure?

• Due to a predicted increase in equity prices

• Because of the potential for higher bond yields

• To avoid the impact of central banks going negative

• To capitalize on a shortage of government bonds

What is the main reason Sheets dismisses the supply argument for Treasurys?

• The supply of Treasurys is increasing

• The supply argument was proven wrong last year

• The Fed is hiking rates rapidly

• The ECB is not involved in QE

What is Andrew Sheets' view on the dollar bull market?

• It will reverse due to emerging market growth

• It is a temporary pause in a longer trend

• It is unaffected by rate divergences

• It is over and will decline

Which factor does Sheets mention as supporting the continuation of the dollar bull market?

• Decreasing US interest rates

• Emerging market borrowing pressures

• Stable energy prices

• Decreasing global trade