An 'Ominous Flattening' Could Signal Recession by End of 2019

That's per nearly half of US CFOs in Duke/CFO Global Business Outlook survey
By Jenn Gidman,  Newser Staff
Posted Dec 12, 2018 7:21 AM CST
ETA for Recession: 2019-2020, per Majority of US CFOs
The country's CFOs are nervously keeping an eye on things.   (Getty Images/claffra)

President Trump has been crowing over the past few weeks about the "best" and "greatest" economy "in the history of our country," as well as the "hottest jobs market on planet Earth," but the nation's top financial officers are less optimistic. Almost half of them predict the US will be hit with a recession by the end of 2019, while more than four-fifths think that economic downturn will come by the end of 2020, per a Duke University/CFO Global Business Outlook survey cited in the Wall Street Journal. "All of the ingredients are in place" for such a decline, the director of the survey notes, including a "waning expansion" that started almost 10 years ago, an uptick in market volatility, and the "ominous flattening of the yield curve," which has been an accurate recession predictor for the past half-century.

CNBC notes that even though the housing market got hit hard during the last recession a decade ago, that arena could actually prove to be an "unlikely safe haven" this time around. "Other than during the GFC (Great Financial Crisis) [of 2008], home prices have kept rising even during recessions," an equity expert for Jefferies Financial Group notes. And "this could be a particularly big cycle for household formation owing to the millennials." The BBC points out that if the timetable proves accurate, such a recession would be in play right around a critical time: the 2020 presidential election. Economist John Graham notes a bit of hope in what otherwise sounds dire. As the slowdown isn't expected to "really kick in" until the later part of 2019, "there's still a period of time where policymakers could take action and hopefully minimize the worst of it," he says. (More recession stories.)

Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.