Stocks could sink 25% in recession as markets underestimate key risk

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A top strategist explains how stocks could sink more than 25% in a recession - and warns markets are underestimating a key risk 'that can change on a dime'

, and stocks could dive later this year if a recession sets in, according to SoFi's head of investment strategy, Liz Young.

Even before the bank turmoil hit, Young said she had anticipated some form of stress to show up in the economy, given the amount of liquidity that the had Fed drained and the increase in borrowing costs. The ensuing bank failures marked a symptom of the Fed's policy choices. Meanwhile, Young pointed out, during the Great Financial Crisis 15 years ago, stocks plunged 58% from peak to trough.

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