A host of indicators are pointing towards a possible recession hitting the US economy in the near future. There have been several reasons that have been pointing to such a possibility. However, fortunately, for the market and especially for the Trump administration, the recession may not indeed cause any sort of expected damages.
There are multiple reasons that have been pointing to the highest possibility of a huge recession hitting the US economy. A few pointers would include the US and Global economic growth, which is declining, a huge turmoil in the market and the trade wars that have been driving the US economy towards a bad state.
However, a few of the wall street economists have been claiming that these may be a huge overblown concern and may not necessarily cause the issues. That does not mean there would be no effect on the economy, but it would not be of the large scale that is being predicted. Wall Street economists and analysts have been predicting a normal slow down in place of the huge slump in the economy.
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There are reasons for this hope. Economists are of the opinion that the economy is going through a slower pace, but has not frozen up. The Federal Reserve expects the growth to be at the current rate of 2 percent. There would be no possibility of the economic crunch. Even the stocks have been holding up to a considerable extent.
To borrow the words of Michael Ryan who is Chief Investment Officer Americas at UBS, and Mark Haefele, “We believe that recession fears are overdone, but investors should prepare for a more sustained period of lower interest rates.”
The key would be to see how Trump Administration handles the linkage of foreign policy to its trade feud with China. Things should be clear quite soon enough.