In a report outlining its market outlook, Pimco said it sees the potential for a recession hitting over the next three to five years. This according to a recent article in Financial Advisor.

Forecasting a chance of “less market-friendly central banks,” the asset manager advised clients to reduce the riskiness of their corporate debt holdings and limit exposure to the euro region’s peripheral countries,” the article reports, adding that three Pimco executives say a U.S. recession is likely over the next three to five years.

Pimco believes that such a recession will be “shallower because there are no signs of corporate and housing overinvestment or excessive consumption that would need to be unwound. But it will be longer because low interest rates and big budget deficits will limit the ability of policy makers to respond.” The firm asserts that such a downturn could also be more dangerous because of low inflation expectations and structural problems with the euro.

Pimco also acknowledged that a trade war could serve as another trigger: “The current trade tensions may be akin to professional wrestling: a spectacle that’s more bluster than real action, but still an inherently risky activity where people can get hurt.”