While even some of the most dogged bulls are throwing in the towel on their optimistic forecasts for the US (see Goldman taking the axe to its 2019 GDP forecast noted earlier), there are those who steadfastly believe that 2019 will be a solid year for the US economy, and that no recession is still in sight.
One among them is Allianz chief economic advisor Mohamed El-Erian, who dismissed concerns that the US is facing a recession in the coming year, saying in an interview on Fox News Sunday that the economy is likely to continue growing at 2.5-3%.
“[A recession] is certainly not becoming a reality. You need either a major policy mistake or a massive market accident to push us into recession. But we will slowdown unless we build on the pro-growth policies.”
On the same day that he penned a Bloomberg op-ed, explaining why “life is getting harder for central banks” in which he concluded that “whichever way you look at it central banks will be exposed to more criticism from politicians, market participants and analysts” – and rightfully so, after all it was the central banks that engaged in the biggest can-kicking experiment in history by injecting $16 trillion in liquidity and the time to pay the piper is fast approaching, El-Erian said that “Trump’s frequent criticism of Fed policy is unusual” (in fact, as Goldman observed earlier it is not at all unusual and that “it is far from unprecedented on a longer-term comparison”), adding that the independence of the central bank is important to economic security (at this point we could go into a tangent how only career economists believe the Fed is “independent”, especially from commercial bank pressure but we won’t).
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