US-China Trade Tensions to Continue Into Next Year, US Economic Growth to Remain Muted: Reuters Poll
According to a recent Reuters poll, the recent progress in US-China trade war towards an interim deal will be unable to reduce the risks of a recession in the US economy within the next two years. Despite the announcement of a phase one trade deal following the last round of high level talks, economists expect no change in economic growth and inflation expectations for 2020 and beyond.
Most economists polled remain unconvinced about the real progress despite the recent confirmation and remain wary that trade tensions between the two world leaders could escalate all over again. In addition, economists remain skeptical of the partial trade deal’s impact as tariffs continue to remain higher than they were even three months ago.
The survey reveals that US economic growth is expected to come in at weaker than expected through most of 2020, and even if the economy does avoid a recession during this time, the US economy will not remain a poster child for robust economic growth as it was in 2018.
The median probability of the US economy sliding into a recession has increased from 30% in September to 35% in October, and the median probability of a recession within the next two years has climbed to 43%. 75% of the economists polled were not convinced that the recent developments were a significant turning point in the US-China trade relationship, and that strained ties could continue well into next year.
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