“The probabilistic risk is the equity markets have more downside than upside,” Gorman said in an interview with Bloomberg Television’s Tom Mackenzie in Beijing Thursday. “The magnitude is not so big. I don’t think we’re looking at a collapse.”

Gorman said that the inversion of part of the U.S. Treasury yield curve was worrying, given that it’s been a leading indicator for recessions over the past half century. But with unemployment at 3.6% and inflation modest, U.S. fundamentals are solid, and any recession would likely be “shallow and short,” the banking chief said. He’d be surprised to see the Federal Reserve lower interest rates this year.

“I wouldn’t encourage people to move one way or the other” on stocks, Gorman said. “There’s too much uncertainty. There’s nothing to be gained from trying to be clever at this point” for retail investors, he said.

Much of the risk of the U.S. moving to full-blown 25% tariffs on all Chinese imports is now “priced in” to markets, Gorman said. While “the market psyche is fragile,” sentiment could shift quickly if U.S.-China trade talks get back on track, he said.

Read more here about Gorman’s take on U.S.-China trade talks.

By year-end, Gorman said he’d expect 10-year Treasury yields to be back between 2.5% to 3%, allowing people to conclude that “what we’re seeing now is a short-term funk.” He also played down any worries over credit markets, saying leveraged loans weren’t a major risk. “I know systemic” dangers, he said. “There’s a bigger bubble in student credit.”