trending Market Intelligence /marketintelligence/en/news-insights/trending/n1fzrh-jftyinrapz7q-vw2 content esgSubNav
In This List

Bernanke says US economy could slow as fiscal stimulus fades

Blog

Using ESG Analysis to Support a Sustainable Future

Podcast

Street Talk Episode 87

Blog

A New Dawn for European Bank M&A Top 5 Trends

Blog

Insight Weekly: US banks' loan growth; record share buybacks; utility M&A outlook


Bernanke says US economy could slow as fiscal stimulus fades

Former U.S. Federal Reserve Chairman Ben Bernanke said the U.S. economy could slow significantly in 2020 after the fiscal stimulus introduced by the Trump administration fades, Bloomberg News reported.

The $1.5 trillion tax cut package and a $300 billion rise in fiscal spending would make the Fed's job more difficult because the stimulus has been introduced at the time of full employment, Bernanke said during a policy discussion at Washington-based think tank, the American Enterprise Institute.

Fed officials say inflation could overshoot the 2% target, requiring a tighter monetary policy in the future. Economists differ on the degree of economic slowdown as stimulus fades. Some economists say upgrading the U.S. workforce and boosting capital stock could extend the stimulus' effects beyond two years. Bernanke said Congress could introduce new spending laws to smooth out the program.

The Congressional Budget Office expects GDP growth to be 3.3% in 2018 and 2.4% in 2019, before slowing to 1.8% in 2020. Fed officials projected GDP growth of 2% in 2020 in their March median projection.