Virginia’s top financial officer is sounding the alarm about an imminent recession — a situation he says the state has been monitoring.

The least we should expect is a significant slowing of growth, said Aubrey Layne, Virginia’s secretary of finance, but a recession in the next 12 to 18 months is “more likely than not.”

“I see those signs coming,” Layne said, citing recent volatility in the stock market. “We saw stock and bond markets react significantly this week.”

The Dow plunged more than 800 points for the first time in over a decade Wednesday, while the bond market followed a pattern that typically forecasts a recession. Layne in part blamed a U.S.-China trade war instigated by the White House, which he said has helped steer markets in the wrong direction.

“The uncertainty is really created by policy in the United States,” said Robert McNab, an economics professor at Old Dominion University. “We don’t have a firm grasp on trade policy. One thing markets and businesses hate is uncertainty.”

McNab, who is the lead author of the 2019 Annual Economic Forecast by ODU’s Dragas Center for Economic Analysis and Policy, predicts that a recession will start between late 2019 and mid-2020. That could impact Virginia more than other states, since the commonwealth is more dependent on federal spending.

“Virginia is exposed to changes in trade policy given our dependence on defense and other types of federal government spending,” McNab said. “We need to take a close look at policy emanating from Washington — it has a significant impact on the commonwealth.”

If the federal government has to slow spending because of falling revenues, the ripple effect could stifle economies like that of Hampton Roads, which has a significant Department of Defense and national security apparatus, and Northern Virginia, which has a large population of federal government employees and contractors. As the largest regions in the state, both of those economies, McNab said, have a substantial impact on Virginia as a whole.

Businesses in the commonwealth could also feel the effects of the federal and state governments having their hands tied, along with the impacts that businesses anywhere would suffer, such as decreases in demand and increases in inventory.

“They need to look at how they would cope with that uncertainty,” McNab said.