A hard Brexit is preferable to an extended period without any decision, said Emmanuel “Manny” Roman, chief executive of Pacific Investment Management Co.

“We are in limbo and being in limbo is not a good thing,” Roman said in an interview with Bloomberg News Editor-in-Chief John Micklethwait Tuesday at the Bloomberg Invest London summit. “An outcome, even if it’s a hard Brexit, is better than having two more years in terms of a situation where nothing gets decided.”

Roman made his comments as the prospects for a last-minute Brexit deal appeared to dim after Prime Minister Boris Johnson told German Chancellor Angela Merkel on Tuesday that an accord is impossible if the EU demands Northern Ireland should stay in the bloc’s customs union.

The situation in the U.K. is chaotic and fragmented, Roman said, adding that the potential for further political upheaval in the country is also a threat.

“We think that a full on Labour government with the program they have would be very bad for risky assets,” he said. Roman compared it to his native France in 1981, when socialists had to undo plans for government takeovers because they were so harmful to the economy.

Turning his focus to the U.S., the Pimco chief, whose firm has more than $1.8 trillion in assets, said the trade talks with China pose a threat to the economy and a resolution isn’t likely in the near future.

With a worsening of the rhetoric between the U.S. and China, “you may be in recession simply because the consumer loses faith,” he said.

That view is consistent with Pimco’s overall take on the economy. The firm has advised investors to reduce risk and focus on capital preservation as the U.S. approaches “stall speed.”

Growth is expected to slow to “a meager 1%” in the first half of 2020, compared with 2.2% projected for all of 2019, according to Pimco. That outlook compares with a 1.7% U.S. growth projection next year, based on 81 estimates compiled by Bloomberg.

Roman also said:

• On debt: The yield curve is not the firm’s greatest concern. “It’s that obviously there is credit in the U.S., which is pricing incredibly tight and there may be a few accidents in the high-yield and the loans market, which the market would have to deal with and absorb.”
• The Federal Reserve’s repurchase agreement operations are more of a technical problem than an indicator of economic trouble.
• On elections and politics: “The equity market doesn’t price Jeremy Corbyn, doesn’t price Elizabeth Warren. If you look at both of their programs, at least on paper, they’re very negative for risky assets.” But even if Warren were to succeed in winning, it’s unlikely she would be able to push through all of her plans, he said.