POLL: Economists Predict Recession Could Hit US In Next Two Years
Economists predict a one-in-three chance of a recession in the next two years, according to a Reuters poll released Thursday.
The poll, taken by 100 economists from May 16 – May 24, reported that while economic growth is expected to remain high at 2.8 percent in 2018, it will likely slow to 1.8 percent in 2020.
Aside from the natural business cycle, economists were concerned about a potential interest-rate rise and new trade barriers. (RELATED: Trump Tariffs ON Aluminum And Steel Likely To Backfire)
“The risk of a recession really picks up after a year, or sometime in 2020 because that is when you start to see the fiscal stimulus start to fade,” said Joseph Song, senior U.S. economist at BofAML, according to Reuters.
Once growth slows, the economy is less able to react to shocks like new tariffs or natural resource shortages, Song explained.
The economists were critical of the 2017 tax cuts, which they say would unnecessarily increase the deficit at a time when the economy was naturally succeeding. “Fiscal stimulus is a terrible idea,” said Jim OSullivan, chief economist at High Frequency Economics.
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