Published: Tue, August 20, 2019
Markets | By Otis Pena

President Trump Refutes Recession Fears, Praises US Econom

President Trump Refutes Recession Fears, Praises US Econom

A strong majority, 74 per cent, of USA business economists appear sufficiently concerned about the risks of some of United States President Donald Trump's economic policies that they expect a recession in the U.S. by the end of 2021.

On CNN, President Trump's Trade Adviser Peter Navarro disputed that the USA had seen an inverted yield curve, often a forerunner of recession because it signals market expectations for weaker growth ahead.

38% of economists surveyed by the National Association for Business Economics expect a recession in 2020 - down from 42% in an earlier survey. Dan Mitchell, Chairman at the Center for Freedom and Prosperity joins Yahoo Finance's Akiko Fujita.

The U.S. Federal Reserve and 19 other central banks have already loosened monetary policy in what Fitch Ratings last week described as the largest shift since the 2009 recession.

When a reporter pointed out that some economists say Trump should prepare for a recession, Trump said, "I'm prepared for everything". Economic growth slowed from an annual rate of 3.1% at the beginning of the year to 2.1% in the second quarter.

He also accused Democrats of hoping for an economic downturn ahead of the presidential election.

The financial markets last week signaled the possibility of a USA recession, adding to concerns over the ongoing trade tensions and word from Britain and Germany that their economies are shrinking.

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It's also unclear why the president wants to take these actions if he believes fears of a recession are overblown. Our consumers are rich.

"I don't think we're having a recession", the president told reporters.

In two tweets Monday, Trump kept up his pressure on the Fed and its chairman Jerome Powell, saying the USA economy was strong "despite the horrendous lack of vision by Jay Powell and the Fed". "I gave a tremendous tax cut and they're loaded up with money". "We are doing pretty darn well in my judgment. Majority are saying we will not have a recession, but the rest of the world is not doing well like we are doing".

The president tied trade negotiations with the ongoing situation in Hong Kong on camera for the first time, saying that a deal between the United States and China would be harder if there is a violent conclusion to protests there, because of concerns raised by U.S. lawmakers.

US President Donald Trump has tried to reassure markets about the risk of the US falling into a recession by saying the economy was doing "tremendously well", the media reported on Monday.

Larry Kudlow, Trump's economic adviser, made a similar assurances during appearances on Sunday talk shows. Mr. Trump decided last Wednesday to postpone until December 15 tariffs on about 60% of an additional $300 billion of Chinese imports, granting a reprieve from a planned move that would have extended duties to almost everything the US buys from China.

Some analysts expressed optimism Monday, saying the longest US economic recovery in history can be prolonged if politicians reach a trade agreement. Before he joined the administration, Kudlow was known for opposing tariffs and promoting free trade during his career as an economic analyst.

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