The global economy is "highly likely" to fall into a recession if the U.S. and China don't reach a trade deal within three months, according to Moody's Analytics Chief Economist Mark Zandi.

His prediction was based on current "extraordinarily fragile" business sentiment that was a result of a protracted tariff fight between the two largest economies in the world that started last year.

"Business sentiment across the globe is extraordinarily fragile," the economist told. He added that a survey conducted by Moody's recently showed that confidence among companies was at its weakest since the end of the financial crisis a decade ago.

If talks between the U.S. and China break down and end without a trade deal, that could hurt business sentiment further and lead companies to reduce hiring, he said. When that happens, unemployment would rise, causing consumers to lose faith in the economy, he explained.