Recession fears fading but not gone

A Washington Post article states that the US economy has shaken free of recession fears.

“The U.S. economy is heading into 2020 at a pace of steady, sustained growth after a series of interest rate cuts and the apparent resolution of two trade-related threats mostly eliminated the risk of a recession,” the article said.

“Some of the obstacles to growth, including the Fed and trade uncertainties, are being removed, and that will have a powerful positive impact on the economy,” said Larry Kudlow, US President Donald Trump’s top economic adviser.

However, Nicholas Spiro, a partner at Lauressa Advisory, a specialist London-based real estate and macroeconomic advisory firm, wrote in a South China Morning Post article that there remain reasons to be concerned about the global economy.

“Survey data on the euro zone published last week showed the bloc’s manufacturing sector remaining deep in contraction territory,” he noted.

“Even the optimism surrounding America’s economy may be misplaced,” he said. “US political risk is increasing sharply in the run-up to next year’s crucial presidential election, and at a time when US equity valuations are stretched.”