(Bloomberg) -- The U.S. expansion will extend well past the 2020 presidential election as recession risks fade and the Federal Reserve keeps interest rates on hold for the next few years, according to Deutsche Bank AG.

Deutsche Bank researchers including Chief Economist Torsten Slok said in a note Sunday that “we do not see a recession for the next three years.” They expect growth will slow this year to 2 percent from the 3 percent in 2018, with the Fed making no rate moves until the end of 2021.

In such an environment, the dollar should depreciate, but the dynamic bodes well for the stock market, according to Slok. He previously forecast a U.S. recession as soon as this year as the partial government shutdown and the trade war with China weighed on sentiment.

Deutsche Bank joins other private forecasters and market signals in reflecting a smaller chance of a recession after a series of more positive economic data releases and a potential conclusion to trade talks between the world’s two largest economies. In particular, the analysts cited increasing expectations for the Fed to stay on hold amid muted inflation signs, for the more optimistic outlook. The U.S. expansion is set to become the longest on record by midyear.

Recession risk escalated early this year following the inversion of a key portion of the yield curve that investors view as portending a downturn. Compounding that, analysts at the time flagged weakened consumer spending and corporate investment, fading impacts of the 2018 tax cuts, and a slower manufacturing sector as potential cracks in the U.S. expansion.

Slok called the inverted yield curve a false alarm.

To contact the reporter on this story: Katia Dmitrieva in Washington at edmitrieva1@bloomberg.net

To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net, Jeff Kearns

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