David Roche, president of the institutional research firm Independent Strategy and former global strategist at Morgan Stanley, told CNBC’s “Squawk Box Asia” on Friday that despite the many headwinds facing the markets—including monetary policy tightening in the West, COVID-19 lockdowns in China and the war in Ukraine —the U.S. can avoid a recession.

“The likelihood is that the world is going to worry most about recession because what you’re describing is a lot of things going wrong at the same time, and a lot of them can’t be reversed, like war,” Roche said.

Roche does admit the markets don’t look great.

“I’m not saying that’s a moment to buy, but I think it is the moment to realize that things do turn around and there are implicit mechanisms in this worldwide position at the moment which could lead us to avoid recession in places like the U.S.”

Roche is bucking the trend by predicting that there won’t be a recession in the U.S. in the near future. Over two-thirds of economists believe a recession will hit in 2023, according to a survey of 49 U.S. macroeconomics experts, and more than 60% of a 750 executive survey say a recession is coming in the next year and a half.

Roche is also going back on his own previous calls he made on CNBC in early April, when he claimed the world was heading for a “war-cession,” warning the markets would be shocked by the soaring commodity prices brought on by the war in Ukraine.

U-turn

Roche, who correctly predicted the development of the Asian crisis in 1997 and the 2008 financial crisis, according to his company’s website, noted that the war in Ukraine was not going to be fixed and was only going to get worse.

He warned that the enormous supply-side shock in the commodity markets, combined with the rising inflation and interest rates, would be a lot for markets to handle.

This has so far proven correct. Markets worldwide tumbled over the last month, as the world faces soaring inflation from the increased cost of food and fuel caused by the war in Ukraine. The S&P 500 posted its worst week since 2020 after the Federal Reserve hiked the interest rate by 75 percentage points.  

Roche predicted that central banks would continue to raise interest rates over the next six to nine months, which in turn would hurt stocks, reduce economic growth, and help to precipitate his war-cession.

But now Roche has gone back on this prediction.

He says that the same brokers and bankers who described the market downturn earlier in the year as a “small correction” are now “rivaling each other to get the headlines and say the most awful things about the world.”