ICG sees low risk of deep recession as balance sheets remain strong
TLT•ICG’s Nicholas Brooks sees a low risk of systemic crisis or deep recession, though current energy prices could slow growth over the next 12 months. French sovereign spreads over Bunds reached their highest level since 2011, while France targets a deficit around 5% of GDP in 2027.
1. Recession and bond outlook
ICG’s Nicholas Brooks sees a low risk of a systemic crisis or deep recession, citing strong corporate, household and bank balance sheets. Current energy prices could slow growth over the next 12 months but are unlikely to trigger a deep recession. French sovereign spreads over Bunds reached their highest level since 2011, and near-term pressures could worsen. France targets a deficit around 5% of GDP in 2027; its commitment to deficit reduction should ultimately stabilize the bond market.
