Federal Reserve Chairman Jerome Powell told the press interest rates will not change after the feds meet December 11th. Powell claims the unemployment numbers prove the economy is in good shape, but not all Wall Street economists share Powell’s optimism.
Several hedge fund managers think the stock market will take a beating in 2020. Those money mavens think Trump’s phony statements about progress in the trade war motivate investors to go big, or his weird comments scare investors, so they run for cover. Mr. Trump knows a strong stock market is one of the ingredients he has to play with in order to convince the public his economic decisions make sense.
But Mr. Trump’s tariff war with China has nothing to do with sound economic planning, according to economic scholars. Tariffs don’t solve trade deficits. Tariffs create more issues, according to Mitch McConnell. But Mr. Trump claims the $40 billion he collected from American consumers since he put the tariffs in place will teach China a lesson. But the only lesson China learned so far is not to trust Trump, according to the Chinese news agency.
American farmers still think the Trumpster has their back in the trade war. But it’s clear the trade war will put a dent in the future business American farmers expect to get from Chinese importers when all the tariff smoke clears. Now that Brazil, Argentina, and Mexico jumped in and took the farm order American farmers usually get, it’s doubtful the Chinese will buy the same amount of farm products when the tariff war ends.
Mr. Trump wants a $40 billion commitment from China before he takes the December tariffs off the negotiating table, according to Agriculture Secretary Sonny Perdue. Perdue claims Trump doesn’t want to enforce the new tariffs, but he will. In fact, Trump plans to add a 100 percent tariff on French products, and that news sent a bolt of fear through the pockets of global investors.
There’s another fly in the economic ointment that could make 2020 feel like 2008, according to bond guru Jeffrey Gundlach. Gundlach is the CEO of DoubleLine Capital. Jeff sees a lot of trouble brewing in the debt market even though interest rates low.
Mr. Gundlach thinks corporate debt is the fly in the economic ointment, and it could spoil Trump’s great economy if variables like an extended trade war, the impeachment process, and the Brexit debacle as well as a repo market that’s short of cash come together and destroy consumer confidence and spending.
Read More: https://www.cnbc.com/2019/12/10/jeffrey-gundlach-says-long-term-rates-headed-higher.html
Dil Bole Oberoi
