Business Economists Expect US Recession to Start in 2020 or 2021

Business economists are split about when the next U.S. recession will start, and few expect it will begin this year.

According to the latest survey from the National Association for Business Economics, 38% of the 226 economists surveyed peg the start of the recession in 2020, down from 42% in the February survey, and 34% expect the recession will begin the following year, up from 25% in February. Only 2% expect the recession will begin this year.

The latest semi-annual survey was conducted primarily between mid- and late July, before the Federal Reserve cut rates on July 31, which was its first rate cut in more than 10 years. Despite the timing, respondents expect that a “shift in monetary policy” will delay the start of the next recession, said NABE President Constance Hunger, the chief economist of KPMG, in a statement.

But close to half of the respondents (48%) expect they will look back after the next recession hits and wonder why the government didn’t do more to support the economy when “times were good.”

Just over half of respondents (52%) anticipate the upper end of the federal funds rate, now at 2.25%, will fall to 2% or below by year-end 2020. Fifteen percent expect it will remain where it currently is, although the current level was not known at the time most respondents were surveyed.

Almost all respondents (96%) support continued congressional oversight of the Federal Reserve and 55% said President Donald Trump’s criticism of the central bank affects the public’s trust in the institution though not the Fed’s decisions.