Pimco analysts Richard Clarida, Andrew Balls, and Daniel Ivascyn cite “insecure stability” as a key factor that will affect policy decisions around the world. “Over our five-year secular horizon we believe that the global economy will be ‘driving without a spare tire’ as the Fed raises rates and shrinks its balance sheet,” write the Pimco Analysts, “and that any pivot to fiscal policy that materializes will be unlikely by itself to boost global growth prospects in a sustainable way.” They believe that any policy shifts will “coincide and collide” with the risk of recession, which they estimate to be around 70% over the next 5 years.

PIMCO: 5 key policy areas will test markets over the next 5 years – Business Insider