NEW YORK (Reuters) – Recession risks have diminished in recent months, and the current window of weakness for global growth will give way to a moderate recovery in 2020, money manager Pacific Investment Management Co (PIMCO) forecast Tuesday in its 2020 outlook.

PIMCO cited additional global monetary easing, a “trade truce” between the United States and China, better prospects for Britain to make an orderly exit from the European Union and early signs of a rebound in the global purchasing managers’ indexes.

“With fiscal and monetary policy now working in the same direction – further easing – in almost all major economies, the outlook for a sustained economic expansion over our cyclical horizon has improved,” PIMCO said in its outlook.

PIMCO expects global growth to trough and rebound earlier than U.S. growth this year. It forecast that U.S. growth momentum may lag global growth momentum at least for some time during the first half of 2020.

While it expects growth to pick up in 2020, it noted that corporate credit vulnerabilities “warrant close attention,” especially if growth should fall short of expectations.

Also, while the Federal Reserve and other major central banks have helped to extend the global expansion by adding stimulus, policymakers will have less policy capacity to maneuver when the next economic downturn hits, PIMCO said in the outlook.

PIMCO said that in its asset allocation portfolios, it expects to have a modest overweight to equities.

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