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Why I'm worried about a recession: Citi strategist

With the Federal Reserve next week expected to deem the economy and job market strong enough to withstand an interest rate hike, Citi's Steven Wieting said Wednesday he's actually concerned about the possibility of a recession in the next couple of years.

Wieting, the global chief strategist at Citi Private Bank, told CNBC's "Squawk Box" that he's putting the odds of a recession at 25 percent for next year, with the chances increasing to 50 percent in 2017, as an overheating labor market risks an economic peak. He said he's concerned about the unemployment rate continuing to fall despite slow GDP growth.

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"We don't think we're going to be getting through the next several years without a recession-recovery cycle," he said. "There are not immediate growth impediments for the United States. I don't think 2016 will be a recession year for the U.S. or the global economy. But we are definitely maturing."

Wieting said he's looking for investment opportunities that can "endure through full cycles." In his firm's best ideas for 2016, he advised investors to be selective when buying U.S. stocks. He said he likes the value presented by euro zone equities, where monetary policy is easing.

Citi Private Bank said it sees opportunity next year in the Japanese stock market, which trades at about a 16 percent discount to U.S. equities. The Bank of Japan is also expected expand easy money policies. Wieting expects Japanese stocks to increase 10 percent in 2016.

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