Nobel Prize-winning economist Robert Shiller, who predicted the 2000 market collapse and 20017 housing crisis, says he believes there’s a less than 50% chance of a recession next year.
“Whether it’s coming next year, I can’t be sure,” he told the Financial News in an interview published Monday.
The Trump Administration’s escalating trade war with China and slowing growth overseas have battered U.S. manufacturing and convinced many economists that a U.S. recession is likely next year. Economists surveyed by the National Association of Business Economics say there’s a 60% chance that the record 10-year-old economic expansion will peter out and a downturn will begin by the end of 2020.
Although the economy has been growing solidly, the Federal Reserve lowered interest rates in July for the first time in a decade to head off a potential slump. Fed policymakers are expected to cut rates again next week.
Shiller, 73, says he “wouldn’t be at all surprised” if a recession begins next year but he doesn’t have the sense of foreboding he had during the dotcom bubble in 2000.
“I’m not a gambler by instinct,” he said, “but I felt more sure than that something was wrong.”
Shiller predicted the market dot-com meltdown in his book, Irrational Exuberance. His new book, Narrative Economics, will be published next month.
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