Calling the odds of a recession in the U.S. and beyond “uncomfortably high,” Morgan Stanley Smith Barney says it has shifted to an overweight position in safe haven assets and is underweighting risk assets. The change is “the most significant change to our tactical asset allocation in more than two years,” Morgan Stanley Smith Barney’s Chief Investment Officer Jeff Applegate and two colleagues wrote in a November markets report.

The allocation change increases the firm’s weighting in global cash, bonds and managed futures, while decreasing exposure to global equities, commodities and real estate investment trusts.

The report pegs a “combination of policy inaction and ineptness in the U.S. and Europe” as the primary cause of recent distress in financial markets. More distress in financial markets likely lies ahead, according to the authors.

Independent research organization the Economic Cycle Research Institute has also warned the U.S. is headed toward recession. “The ECRI has successfully called each of the last four recessions,” according to Morgan Stanley Smith Barney’s report.