Wall Street sees risk of recession rising

The collective wisdom now spreading across Wall Street is that no trade deal will be struck with China before the 2020 election; business investment will continue to sag; and a series of interest-rate cuts from the Federal Reserve won’t be enough to juice more growth out of an economy now in its tenth year of expansion — the longest stretch in American history.

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“It makes sense for everyone to be downgrading, because everyone assumed we’d have some kind of trade deal with China by now and we don’t,” said Megan Greene, an economist and senior fellow at Harvard’s Kennedy School of Government.

“And now we have the risk of the trade war turning into a currency war,” she said. “The consumer is still pretty strong, but business investment looks really bad and if it was going to pick up again it would have by now.”

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