President Trump’s economy is strong and continues to boom. Inflation is mild, unemployment is at all-time lows and the economy has hit a record 10-year stride of growth.
But that could all change very quickly.
In fact, experts are calling for the worst – in the form of another recession – to hit the U.S. before the presidential election.
And that could be terrible for a president seeking re-election.
The Hill reported that over the last few days, economists at Bank America, Goldman Sachs and Moody’s Analytics have alerted that a recession at any moment is becoming more likely… and they’re blaming Trump’s trade policy.
Mark Zandi, chief economist at Moody’s Analytics stated, “I think recession is increasingly likely… I’d put the odd at just over even for a recession between now and the end of 2020, assuming the president follows through on his tariff threats.”
“Fears that the trade war will trigger a recession are growing,” noted Jan Hatzius of Goldman Sachs.
Just hours before that, economists at Bank of America claimed, “we are worried… Our model likely does not fully capture the threat of US-China trade tensions spiraling into a more severe trade war, which we view as the biggest downside risk for the US economy.”
What has all these economists riled up?
The yield curve, or market indicator that is being driven by the tension with China over trade.
But this isn’t the sentiment all over Wall Street.
In fact, chief investment officer of Merk Investments, Axel Merk, said “this time is different” with the yield curve, but there’s no doubt the disagreements between the US and China could negatively affect the economy eventually.
According to The Hill, the dispute that began in 2018, entered a new phase when Trump announced imposing new, 10 percent tariffs on $300 billion of Chinese imports beginning in September, in addition to the 25% tariffs he previously imposed on $250 billion.
Concerns are running high as most though this debacle would be over it.
Zandi noted, “In March or April, there was an expectation that they would reach a deal and wind down the trade war, but those have been shot down… It’s unlikely the president is going to resolve the trade war sufficiently before the election.”
Other warn, it’s only a matter of time before things get worse…
“China can counter by significantly stopping the purchase of goods in the U.S., further destabilize other forces, pull out investments. They haven’t fired all their weapons,” stated Eric Schiffer CEO of the Patriarch Organization.
But most are in agreement that the fate of this blow out is in the President’s hands.
Merk stated he could secure his reelection but he’d just have to cut his losses with China.
Zandi pointed out, “Trump could end this pretty quickly with a tweet.”
We’ll keep a close eye on this story.