Former Federal Reserve Chair Ben Bernanke confirmed what many experts are already predicting: The next recession is less than two years away. In a recent Bloomberg article, Bernanke explained that President Donald Trump’s $1.5 trillion in personal and corporate tax cuts and a $300 billion increase in federal spending will make the Fed’s job more difficult.
“What you are getting is a stimulus at the very wrong moment,” said Bernanke. “The economy is already at full employment.” The stimulus “is going to hit the economy in a big way this year and next year, and then in 2020 Wile E. Coyote is going to go off the cliff,” he stated, referring to the hapless character in the Road Runner cartoon series.
Bernanke isn’t the only expert predicting the economy will see a downturn in 2020. Nearly half of experts recently surveyed by Zillow said they expect the next recession to begin sometime in 2020, according to the company’s Home Price Expectations Survey. Back in August last year, experts predicted there was a 73% chance of a recession by the end of 2020. Experts in Zillow’s survey agreed monetary policy is the most expected catalyst for the next recession.
Other economists, such as those on the National Association for Business Economists panel, say that Trump’s current trade policies could kick off the next recession. A Wall Street Journal survey of forecasters found that 62% said an overheating economy will lead to the Fed tightening, triggering the next recession. Other causes included a financial crisis, the bursting of an asset bubble, a fiscal crisis or disruptions to international trade.
Despite the various reasons economists attribute as the cause for the next recession, they all agree on one thing: it’s just around the corner. Economist expect it will occur by 2020, if not sooner.