Last week, the yield on the 10-year U.S. Treasury bill fell below that of the 3-month note for the first time since 2007. It's a development that investors call an inverted yield curve, and is seen as an early indicator of a recession. Meanwhile, U.S. stocks shook off the bond market's warning with the S&P 500 closing higher on Tuesday after two sessions of losses.
But for Credit Suisse's Global Chief Investment Officer Michael Strobaek, the bond market is usually a better indicator of what's to come.
"I have to say I'm a bigger believer of the predictability by the bond market. And they're signaling either a combination of inflation going much lower and, or, growth going much lower," he told CNBC's Nancy Hungerford on Wednesday at the Credit Suisse Asian Investment Conference in Hong Kong.
"We're really going into a slowdown and a recession," Strobaek said, clarifying that it may not be "right here, right now" — but it could come in 2 to 3 years.
That means the stock market could experience a "real correction" in the next 1.5 to 2 years, according to Strobaek. For now, the Swiss bank is still looking for opportunities to buy equities, he said.
"A nice, small-ish type correction, for sure, will be one trigger. Another one would be to see Europe stabilize a bit, China reaccelerating and that could be good for the second half ... I'm waiting patiently," Strobaek said.