President Trump on Thursday, Aug. 15, downplayed the recent stock market drop and fears of a recession, quoting some positive economic indicators to support his claim the economy is good.
“Tremendous retail numbers were announced today, which really is a great indicator of how well our country is doing, how well our economy is doing. Those are real numbers. Walmart announced; others announced. We had some tremendous numbers come out today, which I’m sure you saw. So we’re very happy about that. We’re doing very well,” the president told reporters before leaving for New Hampshire for a rally.
“The economy is incredible. The consumer—probably above all else, the consumer is doing incredibly.”
The president mentioned Walmart numbers as an indicator for strong consumer spending.
President Trump also said the economy is strong owing to his winning in 2016. The president warned if he does not win in 2020, the economy will “go down the tubes.”
“The fact that I won lifted our economy greatly. And if I didn’t win, it would go down. And, frankly, if, for some reason that happened in the 2020 election, you’ll see this economy go down the tubes,” the president said.
The president’s comments come amid a recession warning, inverted yield curve, on Wednesday as U.S. stock markets experienced the biggest decline of 2019, with the Dow Jones Industrial Average plummeting 800 points.
As investors see inverted yield curve as a warning sign for an economic recession.
Inverted yield curve happens when short-term bond rates are higher than long-term bond rates, which is not normal.
Often investors require higher rates for long-term bonds than short-term bonds to compensate risks for holding the bond for a longer time.
According to CNN, William Foster, Moody’s lead U.S. analyst, forecasts the U.S. economy will avoid a recession in 2019 and in 2020, despite the inverted yield curve warning sign. The U.S. economy remains strong as unemployment is historically low, consumer spending is booming, and the financial system is healthy.
“Even though we’re discouraged by the yield curve’s shape right now, we see few signs of danger ahead,” said John Lynch, LPL Research chief investment strategist, in a blog post, CNN reported.
President Trump on Wednesday also blasted Federal Reserve Chairman Jerome Powell, calling him “clueless.”
The president again blamed the Fed for increasing interest rates four times in 2018, making the economy to slow down, “Our problem is with the Fed. Raised too much & too fast,” the president tweeted.
..Spread is way too much as other countries say THANK YOU to clueless Jay Powell and the Federal Reserve. Germany, and many others, are playing the game! CRAZY INVERTED YIELD CURVE! We should easily be reaping big Rewards & Gains, but the Fed is holding us back. We will Win!
— Donald J. Trump (@realDonaldTrump) August 14, 2019
“Spread is way too much as other countries say THANK YOU to clueless Jay Powell and the Federal Reserve.”
“CRAZY INVERTED YIELD CURVE! We should easily be reaping big Rewards & Gains, but the Fed is holding us back. We will Win!” President Trump said.