Markets

Carlyle Group co-CEO says there will 'probably not' be a recession in 2020

Key Points
  • Carlyle Group co-CEO Kewsong Lee said the U.S. economy will not go into a recession in 2020.
  • "My confidence level isn't as high as it was maybe a year ago, but I do still think there's enough positive momentum, especially coming from the consumer sector ... that we're going to not see a recession," Lee told CNBC's Wilfred Frost on "Squawk on the Street" on Wednesday.
  • Lee said he is hopeful for a phase one trade deal but "there are lots of structural issues" as the U.S. and China learn how to coexist.
VIDEO2:2602:26
The Carlyle Group's Kewsong Lee: Our data says recession unlikely in 2020

A Carlyle Group co-CEO said the U.S. economy will avoid a recession next year, despite slowing down.

"Probably not," the private equity firm's co-CEO, Kewsong Lee, told CNBC's Wilfred Frost on "Squawk on the Street" on Wednesday when asked about a 2020 recession. "My confidence level isn't as high as it was maybe a year ago, but I do still think there's enough positive momentum, especially coming from the consumer sector ... that we're going to not see a recession."

The trade war between the U.S. and China and weakness in the manufacturing industry has caused investor worries about whether the U.S. is slipping into a recession. The Federal Reserve has lowered interest rates three times this year to offset some of the weakness. However, a tight labor market and a strong U.S. consumer is keeping the economy in the longest economic expansion in U.S. history.

"The consumer sector is certainly strong and it's offsetting some of the weakness we're seeing in industrial," said Lee.

He is anticipating an "extended period of slower-than-ideal growth." He expects policy issues and a lot of volatility. "That environment is going to be a slow sideways grind for a lot longer than people might think," Lee added.

Lee said he is hopeful for a phase one trade deal but "there are lots of structural issues" as the U.S. and China learn how to coexist.