Nobel-prize winning economist Robert Shiller warns that stock-market chaos will continue to linger and could push the nation into a recession.

“It’s highly likely now that we’ll have a recession,” the Yale University professor told CNBC. “It’s already disrupting business. It’s already causing people to pull back. We’re not going to see creative new investments blossom in this environment.”

Investors are likely to see more big swings until the number of infections from the new coronavirus decelerate, market watchers say, and they also want a big, coordinated response from governments and central banks.

Shiller told CNBC that stocks and the economy are extremely vulnerable right now because coronavirus panic hasn’t peaked yet.

“This disease is contagious even before it shows obvious symptoms. So, it’s going to be harder to quarantine people in this epidemic. That’s the narrative, and we haven’t gotten very far into it yet,” he said.

“So, the potential for market disruption because of a scary narrative is quite high,” he said.

“What we have now is really two epidemics. We have an epidemic of the coronavirus, but we also have an epidemic of fear based around a narrative that is not necessarily keeping up with scientific reality. And, this narrative has been quite striking,” he said. “It’s a dangerous time for the stock market,” he said.

“We’ll see how well the measures to reduce the coronavirus epidemic play out. But I wouldn’t put too much hope in that,” Shiller said. “It’s a dangerous epidemic and the epidemic of fear that accompanies it is dangerous also.”

Dizzying swings have been relentless in markets the last few weeks. Stocks had a couple days last week where they rose more than 4%, only for the bottom to give out again.

Nonetheless, hope was rising that the big support efforts from global authorities that markets have been waiting for may be on the way, at least in a piecemeal way. Investors are worried about fallout to the global economy from the coronavirus outbreak, which has pushed airlines to cancel flights and prodded Italy to lock down the entire country, the AP reported.

“Markets don’t trade on good or bad, they trade on better or worse,” said Alec Young, managing director of global markets research at FTSE Russell.

“I would expect the authorities to pull out all the stops to reduce uncertainty,” Young said. “This may be their one opportunity to do that.”

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