Stock markets could see a hefty fall in the coming months due to a slew of trends that point to a downturn in the global economy, one economist told CNBC.
Steen Jakobsen, the often-bearish chief economist at Danish investment house Saxo Bank, cited several factors including growing credit loans, a widening fiscal deficit in the U.S., doubts over infrastructure spending plans and a potential trade war.
"All the data we've seen over the last few weeks has basically been that the consumer is maxed out, we've seen that in credit card loans as well, so I think the consumer is done spending the money," he told CNBC Tuesday.
New data Tuesday showed that U.S. consumer confidence declined in March, falling below expectations and breaking a two month streak of gains.
"I think overall we have been pricing in for Goldilocks and we are closer to Frankenstein to be honest," he said. He added that in a scenario of a potential sudden economic recession, he sees a possible market correction of between 25 and 30 percent.
Jakobsen highlighted a "Goldilocks" scenario that he feels traders are mistakenly pricing in to markets, where fresh economic data are either not too hot or not too cold. Overall, the global economy is currently experiencing lower levels of unemployment and higher growth. Looking at 2018 in particular, many analysts hoped for strong global growth on the back of higher inflation and higher investment, but according to Jakobsen, these drivers "aren't actually materializing." Instead, Jakobsen made a reference to the novel "Frankenstein," arguing that the economy had been skewed by central bankers, who have injected trillions of dollars into the global economy to boost growth and investment.