Just over half (52%) of economists who responded to the National Association of Business Economists’ (NABE) July survey think that the federal funds rate will be 2% or less by the end of 2020. In the group’s February survey, nearly half (48%) said interest rates would be 3% or higher by the end of next year. The survey was conducted before the Federal Reserve’s Open Market Committee cut interest rates last month.

The reversal of the Fed’s 2018 monetary tightening policy with last month’s fed funds rate cut to 2.25% is “about right” according to 62% of respondents. That’s pretty strong, but it is a long way from the 74% who said in February that they thought the Fed’s then-tightening was “about right.”

When asked when the U.S. economy will enter its next recession, somewhat fewer (38%, versus 42% in February) believe the next recession will begin in 2020. More (34%, versus 25% in February) now think the next recession will begin in 2021. Only 2% of respondents think the recession begins this year, compared to February’s 10% who saw 2019 as the launching pad.

Regarding U.S. fiscal policy, just over half (51%) think it is “too stimulative.” That’s a drop from 55% in February and 71% in August of 2018. According to the NABE report, the economists on the panel “believe that the primary objective of current fiscal policy should either be to stimulate more robust economic growth in the medium-to-long term (40%) or to reduce the deficit and debt (37%). Another 15% believe fiscal policy should be used primarily to address income inequality.”

To raise more revenue and reduce the federal deficit, the NABE panelists favored broadening the individual and corporate tax bases (55%) and enacting a broad-based carbon tax (53%). Nearly a third (32%) think both individual and corporate tax rates should be increased. More than a fifth (22%) favor enacting a national sales or value-added tax.

When asked to project the 2019 global GDP growth rate, more than four-fifths (83%) believe growth will slide from last year’s rate of 3.6% to less than 3.5%. Nearly a third (32%) see a growth rate of 3.0% to 3.24%, and nearly another quarter (24%) see growth of 3.25% to 3.49%.

Twice as many respondents (40%) expect the United Kingdom to crash out of the European Union in a no-deal Brexit as the 20% who believe that there will be a hard or a soft Brexit. Only 4% think that the country will stay in the EU.

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