Bank economists do not see a recession on the horizon.
Instead, economists on an advisory board for the American Bankers Association projected Wednesday that the U.S. economy will grow slightly faster in 2016 and 2017 than it did in 2015.
Carl Tannenbaum, the chief economist for Northern Trust, told reporters Wednesday that the group of 15 economists from among the largest U.S. banks is “reasonably confident” that the economic recovery “is likely to last at least another couple of years.”
The favorable projection comes as stock market turbulence, declining industrial production and numerous other economic indicators have led some analysts to suggest that the risks of recession are rising.
The bank economists acknowledged that those risks have risen, and that elevated concerns about slowing growth in China and elsewhere overseas are putting stress on U.S. financial markets or leading to further appreciation in the dollar.
Their outlook remains positive, however, because they believe U.S. consumers remain well-positioned to keep spending.
“There was a conviction that there’s adequate momentum here, and the right policy mix here” to maintain the recovery, Tannenbaum said.
The group of economists come from different parts of the country twice a year to meet with the Federal Reserve Board of Governors.
They expect the Fed to raise short-term interest rates to 1.25 percent by the end of the year, in line with the Fed’s own projections from December, before the worst of the recent market downturns began. They also expect the Fed to allow its balance sheet to begin shrinking from its current $4.5 trillion size in early 2017.
Gross domestic product, adjusted for inflation, will grow at a 2.3 percent rate, fourth quarter over fourth quarter, this year and 2.2 percent in 2017, versus 1.8 percent for 2015, according to the group’s projections.
The unemployment rate is expected to fall to 4.8 percent by the end of the year.
