U.S. Economic Growth Expected to Slow Sharply in 2019
Tue Mar 19 2019
Lucy Harlow (2410 articles)

U.S. Economic Growth Expected to Slow Sharply in 2019

Chief financial officers and even average U.S. citizens have been bracing themselves for a recession, either this year or next.

American executives and investment experts have been more sanguine in surveys, typically discounting the possibility of a significant downturn. And, technically, as a recession means sustained negative economic growth, they still are, according to a new CNBC poll of economists and people in the equities and fixed income industries.

But the 43 respondents offered an average expected real GDP gown of 2.3%, factoring in inflation, which is down from the actual 3.1% year-over-year growth seen at the end of 2018’s last quarter. The projection is also down from a January poll that put growth at 2.44%. The poll also suggests that growth will drop below 2% by 2020.

The biggest two drivers for the lowered expectations are slower global growth and tariffs put into place by Donald Trump.

If Trump wants to be a two-term president, he needs to make a China trade deal and start lowering tariffs across the board,” Hank Smith, co-chief investment officer at Haverford Trust Company, said to CNBC. “This will cause business confidence to rise and capital spending to increase, stimulating the economy.”

When that might happen is a question. Trump has floated the idea of walking away from a deal with China if it isn’t to his liking.

A potential economic slowdown could convince the Federal Reserve to put off another interest rate hike, according to the poll. In January, 78% of respondents expected a rate hike sometime this year. That is down to 60% now.

Lucy Harlow

Lucy Harlow

Lucy Harlow is a senior Correspondent who has been reporting about Commodities, Currencies, Bonds etc across the globe for last 10 years. She reports from New York and tracks daily movement of various indices across the Globe