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Market volatility has spiked once again amid concerns about global trade tensions and rising geopolitical risks, yet in a new report, Citigroup Global Markets Inc. says it doesn’t expect these issues to touch off a global recession.

The report notes that there have been four global recessions since 1961, which have been triggered by either by a spike in oil prices due to geopolitical strife, or a financial market implosion.

While the prospect of an intensifying trade war and other geopolitical strife currently exist, Citi says that they don’t form part of its current forecast for the next four years.

“It is more likely in our view that trade tensions continue for an extended period with episodic instances of higher tensions rather than develop into a full-scale, long-lasting trade war with dramatic economic consequences,” it said.

Additionally, negative political trends, such as populism and authoritarianism, are on the rise in various countries, but the report said “this phenomenon has not gained sufficient momentum to cause a major market event or wider political contagion effects.”

Indeed, even as geopolitical turmoil is increasing, Citi sees these issues having a limited impact on the global economy.

“Political risk is not dead, but it has evolved considerably,” it said. “Geopolitical risks appear less likely to become systemic — thanks to changing commodity supply dynamics — in contrast to previous decades.”

If a global slowdown does develop, Citi noted there’s little room for conventional monetary policy to combat it, but that there is the prospect that fiscal policy could be deployed.

The question will be whether governments have the political will to enact necessary fiscal measures.

“The obstacles to appropriate countercyclical policy when the next global recession threatens are likely to stem from weak political capacity and will, owing to political fragmentation, rather than from a lack of combined monetary and fiscal countercyclical policy space,” it said.

“The impact of political risks is more likely to manifest itself in a slower, weaker government reaction function, rather than as a catalyst of a downturn or major financial market event,” the report concluded.