Vining Sparks’ 2020 Forecast Expanded – Late-Cycle Growth Expected to Slow but Continue in 2020
by Craig Dismuke, Dudley Carter
Despite expectations for soft investment, the record-long expansion is expected to slow but continue on strength from the consumer and tailwinds from government spending and a reinvigorated housing market.
- Business investment is expected to be more stable but fall short of a v-shaped rebound
- The consumer is still expected to be an engine of growth in 2020, but there are more areas of vulnerability evident than there were twelve months ago
- Government spending should continue to be a tailwind for the economy
- Given our expectation for interest rates to remain range-bound in 2020, we expect housing to perform well
- Unlike the beginning of 2019, monetary policy does not appear to be restrictive heading into 2020
- Fed likely to keep its target rate range at 1.50-1.75% with greater possibility of a cut than a hike
- Risks to the forecast appear tilted to downside with short-term upside risks
To view the expanded forecast, please click here.