Pimco's Fels Says Investors Should Prepare for 2020 Recession

The video discusses the potential risks of a recession, noting that while it's not an immediate concern, fiscal stimulus in the US could lead to overheating and a recession by 2020. Investors are currently focused on the flattening yield curve and trade war risks, which have kept yields from rising sharply. Inflation is a growing concern due to fiscal stimulus and shifting policies favoring labor over capital. While rising productivity could counter inflation, it's not the baseline scenario. Central banks, particularly the Fed, are expected to continue tightening policies, impacting the dollar and emerging markets.

What is the primary reason for the potential risk of a recession in 2020?

• A decrease in consumer spending

• Major fiscal stimulus leading to overheating

• A decline in global trade

• A sudden drop in stock market prices

What are the two main reasons for rising inflation risks mentioned in the video?

• Decreased government spending and lower interest rates

• Cyclical risks and protectionist policies

• Technological advancements and increased savings

• Globalization and free trade agreements

How might rising productivity growth affect inflation according to the video?

• It would have no impact on inflation

• It would cause inflation to fluctuate unpredictably

• It would lead to higher inflation

• It would be disinflationary or even deflationary

What is the expected action of the Federal Reserve in response to strong US growth?

• Decrease interest rates

• Maintain current interest rates

• Increase interest rates

• Eliminate interest rates

What impact could a stronger dollar have on emerging markets?

• It could create additional trouble for emerging markets

• It would have no impact on emerging markets

• It would benefit emerging markets

• It would stabilize emerging markets