Several prominent economists and investors have said there’s a heightened chance of a recession by 2020. Lawrence Summers, a Harvard University professor and former treasury secretary under President Bill Clinton, said this week that he thinks there’s “better than a 50/50 chance” of a recession in 2020.

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Powell stressed that the Fed is “watching” the situation closely and monitoring potential cracks in the economy. His biggest concern is weakening growth in China and Europe, although he warned that a prolonged U.S. government shutdown could become a drag on the economy.

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“The principal worry I would have is really global growth,” Powell said, but he added: “I still think the most likely baseline case for China is another year of solid growth.”

The Fed chair, who has been publicly criticized repeatedly by President Trump in recent months, warned that if there is an “extended shutdown,” it would have an impact on the economy that “would show up in the data pretty clearly.”

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JPMorgan Chase has estimated that the partial government shutdown — which is 20 days old Thursday — is shaving $1.5 billion off the economy each week, a modest amount in the context of a $20 trillion economy, but the damages will keep growing.

While there is wide agreement that the U.S. economy will grow more slowly than the roughly 3 percent rate of 2018, there’s a lot of debate about how rapid and steep the slowdown will be. The Fed is projecting 2.3 percent growth this year, but the precipitous stock market drop in December was partly driven by fears that growth will be significantly lower than that.

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Recessions are typically caused by inflation rising quickly and forcing the Fed to respond with high interest rates, or by some sort of bubble in markets. “We don’t see those risks,” the Fed leader said.

Powell also noted that it’s a problem that the Commerce Department is mostly shuttered, which means key economic data such as retail sales and growth in gross domestic product won’t be released later this month unless the government reopens. That makes it harder for the Fed — and investors and government officials — to understand how the economy is doing.

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Trump has urged the Fed not to raise interest rates at all this year. The Fed has projected two more rate hikes, but Powell is now signaling that the Fed will be “patient” on any further hikes.

Asked Thursday if the central bank intends to raise rates at its meeting at the end of January, Powell said, “You should anticipate we’re going to be patient and watching,” which was widely interpreted as a “no.”

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Wall Street traders see a 99.5 percent chance the Fed won’t increase at the end of January, according to data compiled by CME Group.

Many business leaders remain optimistic about the U.S. economy this year despite higher interest rates and large swings in the stock market. The U.S. Chamber of Commerce, which represents millions of businesses, projects low unemployment, modest inflation and 2.6 percent growth for 2019.