Jay Powell tried to walk a fine line when he told a group of bankers he doesn’t expect the U.S. to experience a recession in 2020. But not all Federal Reserve Board members agree with Mr. Powell. Several board members don’t want to cut interest rates 25 basis points in September. But Mr. Powell said a rate cut is in the works unless Trump manages to screw the trade pooch between and mid-September, according to MarketWatch.
Mr. Trump let Jay Powell know he is in the same league as President Xi. Trump called both men are enemies of the United States. Mr. Trump keeps trying to pull some mobster move and remove Powell. But Trump’s lawyers told him to back off, according to the New York Times.
Mr. Powell did say the U.S. economy is solid. GDP growth at the end of June was 2.1 percent. But economists expect growth to slow down at the end of September. Trump’s latest round of tariffs could wipe out all Gross Domestic Product growth by the end of December, according to the New York Times. If that happens, economists say the U.S. will enter a recession in June 2020.
In 2020, Trump’s tariffs will cost American consumers $2,000 a year. If he decides to raise the tariff percentages again that number could be more than $3,500 a year.
The consumer sector of the economy is the only sector of the economy producing any kind of economic input. Manufacturing is in the toilet, and businesses don’t want to hire or spend to expand if Trump continues to disrupt global economic dependency, according to the Washington Post.
China does feel the economic pain of Trump’s tariff war. Chinese manufacturers have a lot of production space available. Plus, too much national debt may slow their economy down. China’s GDP growth at the end of June was 6.0 percent. That number should drop by the end of the year, but Chinese officials say they will make sure growth stays at 6.0 percent by injecting more money into the consumer sector of the economy.
There are signs China wants to make a deal. China’s exports dropped in August, so Wall Street thinks the Chinese government will introduce some kind of economic stimulus.
China said it would buy more farm products if Trump lifts the ban on Huawei. And they also want Trump to stop the December tariffs, according to CNBC.
Dil Bole Oberoi
