Economic Perspective: Top Five Questions

MARY WALDEN:

“Today’s program looks at the top five questions. Mike, you do scores of talks and presentations around the state each year. What are the top five economic questions people are asking you, and briefly, what’s your response?”

MIKE WALDEN:

“Well I get a variety of questions, but I do think there seems to be similarity and common questions. And again this is based on talking to groups all across the state. Number one clearly is, “Is the economy going to continue to grow?” That seems to be the top question. My answer, short answer, is yes. I think at least through the end of 2019.”

“The second question right now, and this reflects obviously what’s in the news, “Is a trade war with China hurting us?” And my answer is yes. It’s clearly hurting us. It’s hurting certain sectors, particularly in agriculture in North Carolina, more than others, but I don’t think it’s enough that’s going to put us into a recession.”

“Third question: What’s my, my personal, biggest fear about the economy? My answer is debt. The economy is taking on more risky debt. If you look at previous periods prior to recessions tends to be a commonality that businesses, people take on more risky debt. Then if those risks don’t pay off they cut back on their spending. That could lead to a recession so we need to monitor that.”

“Question four: Will interest rates continue to rise? That’s actually an easy one, yes. The Federal Reserve has signaled they’re going to continue to push interest rates up, but I think it’s going to be a slow rise and a fairly slight rise.”

“And then always someone wants to know the answer to this question. Is the stock market overvalued and ready to crash. My answer is always, ‘I’m not smart enough to know.’”

Walden is a William Neal Reynolds Distinguished Professor and Extension Economist in the Department of Agricultural and Resource Economics at North Carolina State University who teaches and writes on personal finance, economic outlook and public policy.