Three fourths of business economists expect a recession by 2021, survey finds The U.S. economy is also extending its long economic expansion. If the economy continues to expand through July 2019, it will eclipse the 1991 2001 period as the longest economic expansion in American history. Despite the heightened recession risks, most of the economists say the Federal Reserve is on the right path of monetary policy. Three fourths of the surveyed economists said the Feds policy is about right, with a majority of economists approving of the Feds current inflation target of 2 percent . In its most recent policy setting meeting, Fed Chair Jerome Powell said the Fed would be patient with its path of monetary policy and. The Fed has pointed toand risks abroad as reasons for the pause. Sixty five percent of respondents expect the Fed to hike one or two times by the end of 2019. The current target range for the federal funds rate is 2.25 percent to 2.50 percent . On the Feds, NABE says the surveyed economists were inconclusive on the impact of the asset rolloff on short and long term rates. A majority of the surveyed economists said the bleaker outlook for the U.S. reflects expectations for a weaker effect of fiscal policy in the second half of Donald Trumps presidency. Two thirds of the survey respondents projects a 0.5 percent boost to GDP growth in 2019 as a result of the 2017 tax cuts, which would be offset by a 0.1 percent to 0.2 percent drag on GDP due to the. The economists also raised a red flag on the growing budget deficit. A majority of panelists said they would be worried if the federal deficit reached 4 percent of GDP. For the fiscal year 2018, the deficit was 3.85 percent of GDP. As a policy matter, the economists were asked to provide their thoughts on the idea of a marginal tax rate of 70 percent on individuals making more than dollar 10 million. At the forefront of the policy idea: Democratic Congresswoman Alexandria Ocasio Cortez, whoas a way to fund progressive policy initiatives like universal health care and the Green New Deal. But 42 percent of the surveyed economists said the 70 percent marginal tax rate would ultimately have a negative net impact on the U.S. The survey also asked questions about other policy matters grabbing headlines; a large majority of respondents did not view illegal immigration at the southern border as a crisis and only 5 percent of respondents think there is a 50 percent or greater chance of Congress passing an infrastructure spending bill in 2019. Brian Cheung is a reporter covering the banking industry and the intersection of finance and policy for Yahoo Finance. You can follow him on Twitter . Read more:

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