In a sharp change toward a darker outlook, respondents to the CNBC Fed Survey have boosted the chance of recession next year to the highest level of the Trump presidency, reduced their support for the president's handling of the economy and lowered their outlook for economic growth and Fed rate hikes — with some even flirting with the idea of a rate cut in 2019.
Still, many of the 43 respondents, who include economists, fund managers and strategists, also argued that the market has overdone it to the downside.
"The notion that downgraded growth prospects are driving the stock market sell-off is backwards," wrote Mike Englund, chief economist, Action Economics. "Stock price declines have driven the growth slowdown narrative, which thus far faces little confirming evidence from actual U.S. economic reports."
Still, the chance of recession in the next 12 months rose to 23 percent, the second straight increase, and up from 19 percent in the prior survey. That's higher than the 19 percent long run average for the 7-year-old survey and 9 points higher than the low of the Trump presidency.