Home Politics Shutdown consequences: Recession is unlikely

Shutdown consequences: Recession is unlikely

Although the partial closure of the US government has somewhat blurred the view of the US economy, it is most likely that a slowdown in growth will happen and a recession will be avoided, says Kevin Flanagan, strategist at WisdomTree.

According to Flanagan, the state of affairs in the economy will remain turbid for a while because it will take some time before the various government institutions in the US that have suspended by the conflict between the Trump and the Democrat majority about the national budget can rebuild their balances.

He assumes that in the first quarter of 2019 the partial shutdown will more than likely have a negative impact on the economic climate, but is expected to recover in the second quarter.

FRS will only get a good picture of the underlying economic circumstances in the spring, so that the timing of a new monetary tightening will almost certainly be pushed backwards, says Flanagan. He anticipates that the Fed will take action again later this year.

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