While the turmoil surrounding Ukraine wasn’t enough to derail a strong U.S. stock rally, the East-West conflict could bode ill for the global economy, says Mark Schofield, head of interest rate strategy at Citigroup.
“All-in-all, it feels as if we may be heading into a summer of grumbling discontent, rather than the steady and progressive U.S.-led recovery that had become the consensus view around the start of the year,” Schofield writes in a commentary obtained by CNBC.
The problem isn’t merely the possibility of military conflict, he says.
“Clearly the tensions in Ukraine have been central to the recent bouts of market uncertainty, but the greater concerns going forward probably come from the risk of significant damage to economic confidence and to economic recovery than from the threat of an escalation in military tensions.”
To be sure, the crisis isn’t strong enough yet to do serious damage, Schofield notes.
“The current crisis seems to have the right mix of potential threats and risks to finally unsettle investors, but it probably needs to be a little more widespread before serious damage is done.”
Full article: Citigroup’s Schofield: Global Economy ‘May Be Heading Into Grumbling Discontent’ (Money News)