Similar negative Wall Street sentiments about the global economy have been echoed by other professional investors, hedge fund managers and bankers like Ray Dalio, Stanley Drunkenmiller among others.

A global recession could be triggered by the conflict in the Middle East as the humanitarian crisis compounds the challenges facing an already precarious world economy, two of Wall Street’s biggest names have warned recently.

Larry Fink, chief executive of the world’s largest asset manager, BlackRock, said a combination of the Hamas atrocities of October 7, Israel’s resultant attack on Gaza and Russia’s invasion of Ukraine last year had pushed the world “almost to a whole new future”.

In a separate interaction, while agreeing with this prognosis, Jamie Dimon, the chair of America’s biggest bank, JP Morgan, added that the world is facing a crisis that is “arguably the most serious since 1938”.

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Rising fear creates a withdrawal from consumption or extra spending: Larry Fink

In an interview with the Sunday Times, Fink stated, “When the Russian invasion occurred in Ukraine, we said that the peace dividend is over. Geopolitical risk is a major component in shaping all our lives. We are having rising fear throughout the world, and less hope. Rising fear creates a withdrawal from consumption or spending more. So fear creates recessions in the long run, and if we continue to have rising fear, the probability of a European recession grows and the probability of a US recession grows.”