Morgan Stanley's co-president says expect 'fire and ice' as a massive shift in markets gets underway

• Global markets are experiencing a paradigm shift after 15 years of low interest rates, according to Morgan Stanley's co-president.
• "It's an extraordinary moment… it signals the end of 15 years of financial repression," Ted Pick said.

Morgan Stanley's co-president has become the latest Wall Street figurehead to warn of upheaval in global markets as the post-financial crisis era of low interest rates and cheap debt crashes to a sudden halt.

Ted Pick said that investors need to be wary of the twin threats of high inflation and a potential recession - which he labeled "fire" and "ice" respectively.

"We'll have these periods where it feels awfully fiery, and other periods where it feels icy, and clients need to navigate around that," Pick told the Bernstein Strategic Decisions Conference in New York. "We'll be having this conversation for the next 12, 18, 24 months."

US markets have delivered strong returns since the 2008 financial crisis, with loose monetary policy leading to an abundance of cheap money - and the S&P 500 posted a record-breaking 69 all-time high closes last year.

But there's been significant upheaval in 2022, as investors grapple with rising interest rates, the looming possibility of a recession and Russia's invasion of Ukraine.

Pick isn't the only Wall Street figurehead to predict a massive market shift. JPMorgan chief executive Jamie Dimon recently told investors to brace themselves for an "economic hurricane", while Citigroup's CEO Jane Fraser said that a recession looks inevitable in Europe and possible in the US.

"It's an extraordinary moment," Pick said. "We have our first pandemic in 100 years, we have our first invasion in Europe in 75 years, and we have our first inflation around the world in 40 years."

"When you look at the combination, the intersection of the pandemic, of the war, of inflation, it signals paradigm shift, the end of 15 years of financial repression and the next era to come," he added.

Pick, who heads up Morgan Stanley's trading and banking division, has worked for the bank for 32 years. He was appointed as co-president in June last year.

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