A US recession is possible within the next couple of years, according to Royal London Asset Management (RLAM) head of multi-asset Trevor Greetham.
Speaking to New Model Adviser®, Greetham said he was concerned about the aftermath of American president Donald Trump's fiscal reforms.
'Well the growth is still quite strong, the fiscal stimulus from Trump is feeding through over the next three to six months,' he said.
'I think my main concern will be next summer. By next summer the fiscal stimulus will be cooling off, the economy will be slowing down, and we'll have had another six months of interest rises in America, and we're already seeing the housing market flatten out if not weaken, and that's quite a good lead indicator for growth generally.'
'So we're starting to think that in the next couple of years a recession is possible. So it pays to be a little bit more cautious. Look at your multi-asset funds, check what kind of "funky stuff" is under the bonnet there; make sure there's a strategy to deal with a downturn.’
Greetham added that RLAM had examined seven possible Brexit deal outcomes, of which the 'Chequers' deal was the least likely.
A deal of this nature would see the UK committed to 'continued harmonisation' with EU rules, avoiding friction at the UK-EU border, including Northern Ireland.
'We narrowed down the possible outcomes for next March to seven possible outcomes – all of them seemed quite plausible – the least likely was Chequers,' he said.
'To me this really matters because sterling is in a very tight trading range versus the euro at the moment, because traders don't know which way it's going to go. It is going to move one way or the other and that will impact portfolios.'
You can watch our interview with Greetham in full above.