The latest Reuters poll showed that a strong majority of the economists polled believe that the chances of a US recession has increased over the last month amid escalating US-China trade war.
“The chances of that happening in the next two years at 40%.
That is up from a median 35% in last month’s poll, the first time it had dipped slightly from where it held since December last year, before a crushing sell-off on Wall Street as 2018 came to a close, in part because of those worries.
While only a single-digit percentage of respondents say a U.S. recession is likely in the coming year, more than one-quarter of economists polled see a greater than 50% probability of recession within two years.
The most pessimistic call for the probability of a recession in one year also has crept up, from 60% to 70%.
The U.S. economy is forecast to have already lost considerable momentum, slowing to 2.0% in the current quarter from 3.2% in the first three months of the year
Nearly 75% of economists, or 52 of 70, who answered an additional question on what the U.S.-China trade war developments this month had done to the risks of a U.S. recession said they had increased.
But over half of the smaller set of economists who answered another additional question said the Fed is likely to cut rates before end-2020. Among those respondents, more than 80 percent expect a rate cut to be the central bank’s next policy move.”
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