Foreign media said most analysts believe the next recession in the United States will come sooner. They now expect the federal reserve to cut rates again in September and again next year.
Reuters recently reported that despite expectations of further easing, the median forecast in a solstice poll on August 6 put the odds of the U.S. economy falling into recession in the next two years at 45 percent, up from 35 percent in the previous poll and the highest since the survey first asked the question in May 2018.
A closely watched bond market gauge of the risk of a U.S. recession has issued its strongest warning since March 2007, the report said.
Nearly 70 percent of analysts say recent developments have brought the U.S. closer to the next recession.
With the central bank's preferred inflation measure, the core personal consumption expenditure (PCE) price index, not expected to rise much, the fed is expected to cut interest rates by 25 basis points in September, bringing the target for the federal funds rate to 1.75 percent to 2.0 percent, the report said. Another easing is expected late next year.
Analysts last month expected another rate cut in the fourth quarter, after the July rate cut, but no more next year.
Financial market traders have increased their bets on further fed rate cuts, with one expected in September, another quarter-point cut in October and a more than 40 per cent chance of another cut in December.
But it is unclear whether policymakers are willing to cut rates again, let alone several times, especially after fed chairman colin Powell said the latest rate cut was a "cyclical adjustment."
"We are concerned about a negative feedback loop," said aditya bawi, senior global analyst at bank of America merrill lynch.
Asked whether the U.S. economy needs to cut interest rates further this year, nearly three-quarters of respondents said it does, the report said. The rest said no.
"The fed made the mistake of thinking that this was a cyclical adjustment and that they could delay the recession by a couple of precautionary rate cuts." Philip marley, senior us strategist at rabobank.
"They don't need to cut rates right now. "But they think if you cut rates now, you don't have to do it again, and I think it will be futile."
U.S. economic growth is expected to slow to a 1.8 percent annual rate by the end of 2020 from 2.1 percent in the previous quarter, according to the latest Reuters poll, down from 3.1 percent in the first quarter of this year.
That view was unchanged from last month, the report said, even though more analysts now expect a sharp slowdown.
It is even harder to judge what President trump will do or what he will do next. "Trump is playing a game of chicken," said rabobank's Mr Marley.