Recession risks are fading, business economists say, but political tensions pose threat to economy

WASHINGTON (AP) — Just a quarter of business economists and analysts expect the United States to fall into recession this year. And any downturn would likely result from an external shock — such as a conflict involving China — rather than from domestic economic factors such as higher interest rates.

But respondents to a National Association of Business Economics survey released Monday still expect year-over-year inflation to exceed 2.5% — above the Federal Reserve's 2% target — through 2024.

A year ago, most forecasters expected the U.S. economy — the world's largest — to slide into a recession as the Fed raised interest rates to fight a burst of inflation that began in 2021. The Fed hiked its benchmark rate 11 times from March 2022 to July 2023, taking it to the highest level in more than two decades.