Inflation is the 'biggest poison' for the global economy as recession risk rises, Deutsche Bank says

Europe's proximity to the war in Ukraine and its reliance on Russian energy imports render the continent uniquely vulnerable to the conflict and a potential stoppage of Russian gas flows.

"One thing is clear: if there is a sudden stop of Russian gas, the likelihood of a recession coming sooner is obviously far higher. There is no doubt," Sewing said.

Sewing: Inflation ‘really worries me most’
Given this confluence of challenges, Sewing said he is increasingly reluctant to rely on traditional models as the economy faces a “perfect storm” of “three or four real levers which can cause, at the end of the day, a recession.”

Sewing said inflation was the biggest concern, however.

"I would say that the inflation is something that really worries me most and therefore I do think that the signal which we got from the central banks, be it the Fed but now also the ECB, is the right signal," he said.