The International Monetary Fund (IMF) chief economist Gita Gopinath said that the ongoing trade war between the United States and China remains the number one issue for policy makers but at the same time it’s not all bad news for the global economy. CNBC’s Steve Liesman spoke to Gita Gopinath at the Jakcson Hole Symposium and asked if she is seeing recessionary signals.

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“Trade is indeed showing a lot of weakness. We are seeing a lot of weakness in industrial production and manufacturing, but on the other hand services is still holding up though not as brightly as it was at the start of this year. Therefore, it’s a mixed bag of signal,” said Gopinath.

“On the one hand you are seeing huge demand for safe assets which is what you typically see before a recession, equity markets are volatile but they are still high. So it’s mixed around the world and consumer confidence, services sectors are still doing fairly well especially in some parts of the world like the US,” she added.

Talking about the US trade policy, Gopinath said: “It’s not just the tariffs that are in place but there is tremendous uncertainty about where this policy is headed and will there be closure anytime soon and that’s weighing business confidence and we are seeing it on investment.

“However, an important part of this is also what’s coming from emerging markets; we have seen pretty strong weakness in emerging markets and it's Brazil, Mexico, Argentina, Turkey and that’s weighing on growth and that’s coming also from idiosyncratic factors in their own countries,” she added.

On the weakness in global economy, she said: “There is more to be done on the fiscal front. I think it would be a good idea for governments to plan for a possibility that they will need to use their fiscal tools more aggressively than it has been used right now especially countries that have fiscal space, but the number one issue is with respect to trade and trade policy and that has to be addressed.”