Global growth continues to slow and the U.S. manufacturing sector is in recession. However, events unfolded in September and early October that reduced downside risks and the perceived threat of imminent U.S. and global recession. The U.K. may be on the verge of an orderly exit from the European Union (EU), which would reduce economic risks for both. An EU-friendly government took power in Italy, removing for now an existential threat to the EU. China and the United States backed off belligerent rhetoric. President Trump announced a Phase 1 trade deal and suspended implementation of tariffs scheduled for Oct. 15, although the “deal” appears to lack real substance. The European Central Bank approved aggressive monetary easing policies intended to boost EU economic activity. And, the U.S. Federal Open Market Committee on Sept. 18 cut the federal funds rate for a second time and on Oct. 11 announced plans to increase bank reserves substantially. While near-term risks have diminished, long-term risks remain and continue to build.