US Recession Fear Raises ‘Gray Swan’ Risk for Bond Investors
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Investors are fretting that a year-long rally in global credit is papering over the risk that US policy uncertainty tips the world’s largest economy into a recession.
Some are sounding the alarm that this could be a ‘gray swan’ event — a shock that is predictable in theory, but largely ignored until it hits. Unlike black swans, which are truly unforeseen, gray swans lurk in plain sight.