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Phase one trade deal and the Us economy

US-China Could Reach a Phase One Trade Deal Within Three Months: Reuters Poll

Posted Friday, December 6, 2019 by
Arslan Butt • 1 min read

According to a recent Reuters poll, a majority of economists express reasonable confidence that the US and China could sign the phase one trade deal within the next three months. However, the poll reveals that economic growth outlook for the next year remains mostly unchanged.

Economists polled forecast that the US economy could grow by 1.6-1.9% in the coming quarters till mid-2021. A similar poll in the previous quarter had forecast a higher economic growth of around 2.1% for this period. Core PCE prices are also expected to average around 1.9%, same as forecast in the previous edition of the poll.

Although most economists indicated confidence that the US and China could finalize and sign the partial trade deal soon, they stated that the US economic growth would depend on how negotiations progress beyond the phase one deal. Any further breakdown in trade talks could end result in the US economy taking a turn for the worse.

There is also some uncertainty among economists on what the Fed’s next move could be. For now, most economists feel that the Fed could keep interest rates steady around 1.50-1.75% at least until 2022. However, a majority still lean towards the possibility of another rate cut instead of a hike in case the Fed plans any changes to its interest rates.

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