President Trump and his economic team are downplaying warnings of slower economic growth, despite signals from the bond market that a recession could be looming. But the president is also calling on the Federal Reserve to cut interest rates again to help boost growth.
“Our Economy is very strong,” Trump tweeted Monday, accusing Democrats of badmouthing economic conditions to boost their chances in the 2020 election.
“I don’t think we’re having a recession,” Trump told reporters on Sunday. “We’re doing tremendously well. Our consumers are rich. I gave a tremendous tax cut, and they’re loaded up with money. They’re buying.”
White House economic adviser Larry Kudlow also stressed consumer spending during appearances on the Sunday morning talk shows.
“I don’t see a recession,” Kudlow said on NBC’s Meet the Press, echoing his boss. “Consumers are working at higher wages. They are spending at a rapid pace.”
Consumer spending is a major pillar of the U.S. economy, and data from the Commerce Department last week showed retail sales are still strong.
That helped to temper recession warnings from the bond market, which triggered the year’s biggest selloff on Wall Street last week. The Dow Jones Industrial Average and the S&P 500 both fell about 3% last Wednesday.
Market indexes have since rebounded. Stocks were up more than 1% in early trading Monday.
Trump said again that the Fed should keep lowering interest rates — and this time he called for a cut of at least 1 percentage point. Last month, the central bank cut rates by a quarter-point.
“The Fed Rate, over a fairly short period of time, should be reduced by at least 100 basis points,” Trump tweeted. “If that happened, our Economy would be even better, and the World Economy would be greatly and quickly enhanced-good for everyone.”
The Commerce Department granted a partial reprieve on Monday to Chinese telecom giant Huawei, allowing the firm to keep buying components from U.S. suppliers for 90 days, in order to serve its existing customers.
Trump said a larger trade deal with China may have to wait.
“I’m just not ready to make a deal yet,” Trump told reporters on Sunday. “China would like to make a deal. I’m not ready.”
Trade tensions with China and other countries have depressed manufacturing in the U.S., and limited business investment. Economic growth slowed from an annual rate of 3.1% at the beginning of the year to 2.1% in the second quarter.
A survey by the National Association for Business Economics found nearly four in 10 economists expect a recession next year, though an even larger share (48%) don’t expect a downturn until 2021 or later.