Business economists and analysts expressed optimism about the US economy in a recent survey, with only 25% expecting a recession this year. This marks an improvement in outlook from last year, when most saw a recession on the horizon. Respondents predict that an external event, like tensions with China, would be the likely driver in such a scenario, rather than higher interest rates or other domestic influences.
The National Association of Business Economics survey also showed most respondents expect year-over-year inflation to surpass 2.5% through next year, which is higher than the Federal Reserve’s 2% goal.
Twenty-one percent of respondents feel the Fed’s policy is “too restrictive” and that it is keeping rates unnecessarily high, up from 14% of respondents in August. However, 70% said the rate is “about right.’’ The Fed has raised its benchmark rate 11 times between March 2022 and July 2023.
Survey respondents expressed significant concern about global conflicts, with 63% saying a conflict between China and Taiwan is at least a “moderate probability.” Additionally, 97% see at least a moderate possibility that Middle East conflicts will bring oil prices from $77 per barrel to more than $90, along with creating shipping challenges. And 85% are concerned about instability in the US related to the presidential election.
