Current downturn will not match 2008: Malvey

The current market downturn and the instability impacting the US and Europe will not be as bad as the 2008 financial crisis, according to BNY Mellon Asset Management chief global market strategist, Jack Malvey.

Malvey has predicted the worst case confronting the US was a mild brief recession, but added "we are more likely to experience a low-growth recession".

"While the worst of the current downdraft likely is behind us, it is difficult to determine the exact market bottom for these types of corrections," he said.

Malvey characterised the current environment as "an aftershock to the Great Recession" and noted that anxiety about a second economic dip after a primary recession had long been common.

"Typically, such concerns and negative market reaction about a possible secondary recession tend to dissipate within three months as a result of negative news exhaustion, markets finding an equilibrium state, and the emergence of attractive equities and credit debt after their decline to discounted valuations," he said.

Nonetheless, Malvey said the US was facing a long journey with difficult decisions needing to be made in coming years "along the road to fiscal rectitude".