Recession risks have soared because the banking fiasco could trigger a credit crunch, Pimco says

• The banking fiasco has heightened the risk of a recession, according to Pimco.
• Rattled lenders could tighten their balance sheets and fuel a credit crunch, the bond giant warned.
• “Recent events will likely lead to a mild recession in the case of the US,” strategists said Tuesday.

The risk of a US recession has increased because the banking turmoil will likely trigger a credit crunch, according to Pimco.