Economic growth in 2020 is likely to come in softer than 2019 as the cycle becomes even more extended, any residual impact from fiscal stimulus fades, and economic uncertainty around trade, elections, and global growth continues to dampen investment activity. However, a recession still does not seem to be in the cards for 2020; in effect, it will feel a little like slack tide—a period when the tide is no longer rising or receding. In this week's Economics Weekly we present our outlook for 2020, outlining the probability of a recession; the likely paths of consumer and business spending, inflation, and Fed policy; and highlighting three downside risks and two notable upside rewards.
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Richard de Chazal, CFA is a London-based macroeconomist covering the U.S. economy and financial markets.