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Investor Claims that the US Economy Could Enter a Mild recession in 2020

The US economy
The US economy

Guy Miller, chief market strategist and head of macroeconomics at Zurich Insurance, says that the US economy could enter a state of slight economic recession starting next year because the Federal Reserve will likely lower interest rates in order to boost growth.

Miller said: “Our view still is that we (will) have a mild U.S. recession in 2020. People forget that the reason interest rate should be cut, and the reason that the Fed has done this pivot, is because global conditions are getting worse. U.S. conditions, we believe, will get worse — that will impact earnings and ultimately margins as well.”

He also predicted that the Federal Reserve will cut interest rates once before the end of 2019.

However, other analysts disagree. One of them – Bob Baur, chief global economist at Principal Global Investors – said that he expects that the U.S. central bank will cut interest rates twice: once in July and once in September, but a worsening U.S. economy is not the reason that is dictating the Federal Reserve’s actions.

He said that instead, the Federal Reserve will aim to make sure that interest rates correspond to inflation predictions, in addition to looking into extending the current growth of the economy.

Baur also said that he predicts that the slowdown in the global economy will stop in the next couple of months.

Related: Huawei: Smartphone Sales Down 40% as US-China Trade War Intensifies

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