The CNBC Fed Survey put the probability of a recession in the next 12 months at 26 percent, the highest since January of 2016. There seems to be a growing concern about the possibility of a global economic slowdown as China and the US are showing increasing signals that their economies are starting to slow the pace of expansion. Some analysts say that in the final quarter of 2018, China may have seen economic contraction.
The CNBC Fed Survey last week was with a total of 46 respondents.
According to the survey, the chance of recession spiked to its highest level in 3 years, with 26 percent of respondents saying that the recession will come in the next 12 months. Some respondents suggested that the next Fed hike will not take place until 2020 but most agreed that a hike in 2019, could amount to only one. Recent surveys suggest that 2 hikes were expected in 2019 but again, this number in this survey has dropped to only one.
These respondents pointed to S&P 500 gains of only 4 percent in 2019 and 3.5 percent in 2020. Twenty-seven percent of those surveyed say that the Fed gives too much attention to short-term bond and equity market considerations. The survey showed that the approval rating for handling the US economy by President Trump dropped 10 points to 43 percent. This drop is likely due to the shutdown of December and January.
GDP growth forecasts by respondents falls in the 2.4 percent range. This level of growth is actually, in the current part of the cycle, a respectable level.