Feb 21, 2019

S&P raises probability of 2019 U.S. recession to 20-25%

Dion Rabouin, author of Markets

Economists at ratings agency S&P Global raised the probability of a U.S. recession in 2019 to 20–25% on Wednesday, in large part because of the flattening U.S. Treasury yield curve.

Flashback: Its previous assessment was 15–20%, 3 months ago.

"Although economic indicators continue to point to a sustained economic expansion, heightened investor concerns over global economic developments led to market volatility and disruptions late last year, leaving a mixed picture for the second oldest expansion in U.S. history."
— Beth Ann Bovino, U.S. chief economist at S&P Global

Between the lines: S&P Global releases a quarterly publication that examines 10 leading indicators of near-term economic growth. Two indicators turned negative this quarter for the first time since mid-2017, when the ratings agency's economics group first began to look at these metrics.

  • "Financial conditions have eased in recent weeks, stemming from a significantly more dovish communication by the Fed," Bovino said. "If the easing persists, the quantitative assessment will likely decline in the coming months."

As S&P raises its U.S. recession worries, a new survey shows European money managers are growing increasingly wary of a global recession.

The bottom line: Almost 30% of respondents to Bank of America Merrill Lynch's latest survey of European money managers said a worldwide economic contraction was their biggest concern, the strongest consensus for any single risk since June 2017.

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Police officers wearing riot gear push back demonstrators outside of the White House on Monday. Photo: Jose Luis Magana/AFP via Getty Images

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The latest: Four police officers were struck by gunfire while standing near a line in St Louis on Monday after a peaceful demonstration, Police Chief John Hayden said early Tuesday. They were all taken to hospital with non-life threatening injuries. He said a small group of people had thrown rocks and fireworks at police officers.

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Illustration: Sarah Grillo/Axios

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St. John's clergy: Trump used church as prop, Bible as symbol of division

Photo: Brendan Smialowski/AFP via Getty Images

Clergy of the historic St. John's Episcopal Church expressed furor and confusion over President Trump's visit on Monday, which he claimed was to honor the establishment after George Floyd protestors sparked a small fire on the property Sunday night.

The big picture: Park rangers and military police deployed tear gas and physical force to disperse peaceful protestors from Lafayette Park, which surrounds the White House, so Trump could walk to "pay respects" to the church — and a St. John's rector on the scene revealed in a Facebook post that she was left "coughing" from the tear gas.