Economists and financial experts are increasingly concerned by President Donald Trump’s handling of the economy and are now putting the risk of a recession at the highest level of his presidency, according to CNBC.
In a sharp change toward a darker outlook, respondents to the CNBC Fed Survey have boosted the chance of recession next year to the highest level of the Trump presidency, reduced their support for the president’s handling of the economy and lowered their outlook for economic growth and Fed rate hikes — with some even flirting with the idea of a rate cut in 2019.
Still, many of the 43 respondents, who include economists, fund managers and strategists, also argued that the market has overdone it to the downside.
“The notion that downgraded growth prospects are driving the stock market sell-off is backwards,” wrote Mike Englund, chief economist, Action Economics. “Stock price declines have driven the growth slowdown narrative, which thus far faces little confirming evidence from actual U.S. economic reports.”
The experts now place the chance of recession within the next year at 23 percent, which CNBC noted is up from 19 percent in their previous survey.
Asked how different factors have contributed to the recent sell-off, respondents named “tariff concerns” as the most significant followed by worries about global economic weakness and more Fed rate hikes.
Sixty-seven percent expect that the current trade talks between China and the U.S. will end on March 1 with an agreement to continue talking and without the imposition of additional tariffs. On average, however, the group expects tariffs to subtract 0.2 percent from growth in 2019, double the estimate from the September survey.