Economy

Wall Street veteran Byron Wien doesn't see a recession until at least 2021

Key Points
  • Blackstone's Wien says the recession warning signs he uses, such as poor corporate earnings and employment data, "just aren't in place."
  • He's betting the current economic expansion would last longer than what a group of top business economists recently predicted.
  • "The economy is key to the outcome of the November elections," says Wien, adding that recent strength may give Republicans a lift.
There's something lurking out there that will upset the market, says Byron Wien
VIDEO1:4101:41
There's something lurking out there that will upset the market, says Byron Wien

There won't be another recession until at least 2021, Wall Street veteran Byron Wien told CNBC on Thursday, betting the current economic expansion would last longer than what a group of top business economists recently predicted.

"There isn't a recession in sight," Wien, a vice chairman at Blackstone, said in a "Squawk on the Street" interview. "My view is the earliest we're going to have a recession is 2021."

Earlier this week, the National Association for Business Economics said two-thirds of its members see a recession starting by the end of 2020, with 18 percent even more pessimistic, expecting the next downturn to begin by the end of 2019.

However, the NABE economists generally agree the tax cuts President Donald Trump pushed through Congress will give a significant boost to growth this year and next year.

The current recovery, which began in mid-2009, is the second longest expansion in U.S. history, and would become the longest if it lasts past June 2019.

Wien, whose career in finance has spanned about 50 years, said the recession warning signs he uses, such as poor corporate earnings and employment data, "just aren't in place."

"Maybe they'll develop very quickly. But usually, they take a while," he said. "Right now I see this cycle going on for a couple more years. And as long as that is the case, I think volatility will remain low."

(Volatility refers to the amount of uncertainty in the size and direction of changes in a market, and is typically measured by the deviation of returns.)

There could be 10 percent stock corrections in the meantime but "nothing more severe than that," Wien said. Wild swings in the market have evened out recently after spiking earlier in the year, leading to on-again-off-again corrections.

Wien issued in January his annual list of market surprise predictions for the coming year. Following a banner 2017 for stocks, he warned at the time, correctly as it turns out, the market would experience a correction in 2018.

In a prediction that's yet to play out, he sees Republicans losing both the House and Senate in the November midterm elections.

On Thursday, Wien told CNBC he still believes Democrats will win the majority in the House. "But the odds against that are going up all the time."

"I think the economy is key to the outcome of the November elections," he said. "If people feel they have more money in their pocket, that regulation is being dismantled, that Trump is doing a good job internationally, then I think the Democrats are going to have a tough time of it."

Wien began the predictions list in 1986, when he was chief U.S. investment strategist at Morgan Stanley. He defines a "surprise" as an event that the average investor would assign only a 1 in 3 chance of happening but which he believes has a greater than 50 percent likelihood.

— The Associated Press contributed to this report.