The U.S.-China trade war is unlikely to see a permanent truce over the coming ye...
BENGALURU - The U.S.-China trade war is unlikely to see a permanent truce over the coming year, and while concerns have eased over a U.S. recession, an economic rebound is also not expected any time soon, according to a Reuters poll of economists.
That shift in expectations came after Fed Chairman Jerome Powell indicated that while the central bank was cautious about the trade conflict and slowing growth, it would now pause after cutting rates three timesWhile most major central banks are concerned about the ongoing trade dispute, stocks on Wall Street have touched record highs over the past few months on hopes for a resolution between Washington and Beijing.
“The global economic backdrop is going to remain tough, the U.S. dollar is going to remain relatively firm and we are less positive on the trade story than perhaps the market is currently pricing. The talk of rollbacks and stuff like that – we are not as certain that will actually come through,” said James Knightley, chief international economist at ING.
Over 80% of 52 respondents to an additional question said the Fed had done enough to delay the next recession but that already-modest growth forecasts were largely left unchanged. A strong minority - over 46% of 93 economists - expected rates to be unchanged until at least 2021, compared to 31% of 84 economists in October, in line with interest rate futures.The Fed’s preferred measure of inflation - the change in the core personal consumption expenditures price index - is expected to be 2.0% in the first quarter and then to remain at 1.9% at least until the second quarter of 2021.
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