Fed Chairman Jerome Powell told the press an interest rate cut is in the works. Mr. Powell promised the Federal Reserve would protect the U.S. economy from Trump’s tariffs and free-spending. But many economists think a rate cut won’t stop Trump’s economic bloodbath.
Mr. Trump wants an interest rate cut to stimulate investments and reestablish consumer confidence. Consumer confidence continues to erode thanks to Trump’s trade war with China and Europe, and his quest to stop the country from developing nuclear weapons. Plus, consumers still worry about Trump’s relationship with North Korea and Russia.
Gross Domestic Product growth is weak and getting weaker, according to government economists. The projected growth in 2019 may be less than one percent, according to some economic reports. China’s GDP growth slowed down from Trump’s tariffs, but the latest report from China indicates growth will still more than six percent in 2019.
But despite all the global economic bad news, Trump continues to tell his voter base the U.S. economy is in great shape. Trump bases that claim on the unemployment report. Even though the government claims unemployment is in the 3.2 percent neighbor the real unemployment rate is much higher. The government doesn’t count the tens of thousands of people who stopped looking for employment.
China won’t sit down and talk about a trade deal until Trump drops the tariffs and lifts the ban on its tech industry. Mr. Trump told China he would lift the restrictions, but Commerce Secretary Wilbur Ross said the ban is still in force. Ross did say he will issue licenses to some U.S. companies in the future so they can use Huawei products if they are not a security risk.
Huawei’s CEO Ren Zhengfei told the press his company is ready for Trump ban. Huawei just closed a $3.1 billion deal with Italy and the U.K. and other European countries plan to use Huawei’s 5G platform. Trump tried to discourage Europe from using Huawei. But the company’s 5G network is better than the 5G network the U.S. has in the works, according to European tech officials.
Zhengfei told employees smartphone sales would drop thanks to the U.S. ban. But he recently told the press the company may sell more than 260 million smartphones in 2019. That’s 10 million more than his 250 million sales projection. But in order to meet the new sales projection, Huawei will need help from Google’s Mobile Services. If Google can’t help due to Trump’s license restrictions, Ren said smartphone sales may only reach 230 million.
Dil Bole Oberoi
