A 2020 recession looming?

A 2020 Recession looming?

A 2020 Recession looming?

At the moment, US economy is looking pretty bright. The overall employment rate is excellent, wages are growing steadily and everything is going smoothly. Too smoothly if you ask the economists. The National Association of Business Economics interviewed quite a few of them recently, and it turned out that a majority of them think a 2020 recession is inevitable. With the memories of the big 2007 recession being still very much fresh, a piece of news like this has to be approached seriously. Why are these people so convinced of the outcome and what is going to cause it? Many factors are in play, so read on to learn more about the whole situation.

Why do recessions happen?

So why does recession happen, anyway? Well, the longer an economy is doing well (and the US economy has been doing well for quite a while now) the harder it is to maintain the balance between unemployment, inflation and several other factors. When that balance is threatened, institutions and people often react too quickly and harshly in order to protect their funds and the whole thing spirals out of control very rapidly. The Fed raises interest rates, prices go up as do borrowing costs and a lot of markets get hit. However, there is usually a trigger for this kind of scenario. So, what could trigger a 2020 recession? There are several options you need to look out for.

Potential causes of 2020 recession

The cause for a recession in the next year or so could come from anywhere in the world. For example, the Trump administration’s trade war against China (whose stock market is already doing pretty badly) could grow even more intense which would have serious consequences. Unstable Middle East is also an option, given the control the countries over there exert over global oil production. The EU is seeing a rise of populist governments, which are more than happy to provide people with higher wages by increasing their debt. This can hurt European economy overall and consequently US’ exporting power. The Brexit isn’t really helping things, either. With that said, some economists think none of these scenarios is likely, but the fact remains that they are a minority.

Conclusion

A 2020 recession seems likely, especially given the fact that the US economy has been doing very well for a very long period of time. Most economists (although not all of them) agree that things are going to get more serious in about a year or so. How serious, that’s difficult to tell and depends on a variety of other factors. It could start by Donald Trump making a rash move against China, it could start by oil prices rising once again or it could start over in Europe. So, if you’re a trader or are looking to invest soon, examine the market thoroughly and try to keep an eye on global events. This website will help you with all of that.

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Author: Ben Prescott
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