No Fear Mongering, Just Facts
Group of 20 finance chiefs and central bankers said current risks include uneven growth and the possibility of excessive risk-taking in a low interest rate environment. They also pointed out that when push comes to shove, they will continue to stimulate. From Bloomberg:
"It is critical that we take concrete steps to boost growth and create jobs," Australian Treasurer Joe Hockey, who hosted the meeting, told reporters after the communique was released. "We will use all levers available, including additional fiscal and monetary policy leverage where appropriate."
This Is What Risk-Off Looks Like
If an increasing threat of a global recession is the primary concern, we would expect more conservative assets to be gaining traction. Investor preferences allow us to better understand the stock market's risk-reward profile. For example, when economic fear was high in 2008, the performance of growth-oriented stocks (SPY) was weak relative to defensive-oriented bonds (AGG) (see chart below).