UBS On-Air: Paul Donovan Daily Audio 'Policy-Induced Recession Risk'

In his UBS On-Air daily audio, Paul Donovan notes that crude and diesel prices have risen, with uncertainty over whether last week's commitment to release diesel reserves merely confirmed previously announced releases, and bond and equity markets reacted negatively. If central banks attempt to offset oil-shock-driven inflation with aggressive restrictive policy, they would need to create a recession or near-recession in the non-oil economy — an outcome that is unfavorable for both bonds and equities.