Deutsche Bank cut its global growth forecast on Friday and warned a summer tempest could await financial markets.
The German bank downgraded its estimate for U.S. growth this year by nearly a percentage point, down to 2.3 percent from 3.1 percent.
It now sees world growth at 3.3 percent in 2014, rather than the 3.5 percent predicted in March.
Deutsche said the “remarkable calm” that had settled over markets across the world in recent months would not last.
The widely followed VIX index, which tracks near-term volatility on the U.S. benchmark S&P 500, has declined 15 percent since the start of the year.
“The calm cannot last indefinitely, and the question at hand is whether the clouds on the horizon portend merely a late-summer squall or a potentially far more damaging tempest,” Deutsche economists wrote in a report published on Friday.
“Our baseline forecast assumes the former—a manageable storm.”
Deutsche attributed its cut to U.S. outlook to “weather-driven disappointment” in the first three months of the year.