pretend Donald Trump's economic officials are reassuring investors about
recent white knuckled stock market volatility while Trump's political
advisors are increasingly alarmed that the economy could present a stiff 2020
campaign headwind many of trumps political allies acknowledged up his
reelection prospects hinge in large part on how Americans judge their economic
prospects at the time of the next election and many independent analysts
say that recent market turbulence is a warning sign that the u.s economy will
likely slow and maybe even dip into recession by 2020 at the moment that
scenario could be the biggest threat to Trump's chances at winning a second term
according to interviews with aid current and former senior administration
officials and close White House advisors the president knows this better than
anyone since he is highly attuned to
fluctuations in the stock market and views as a form of polling at times
Trump has bragged about the markets performance on a near daily basis a real
estate mogul who has borrowed heavily Trump is equally obsessed with interest
rates and has closely monitored the run-up to a mid-december Federal Reserve
meeting in which central bankers are expected to raise rates political
advisors have urged Trump to build his economic message around more stable data
points than the daily volatility of the stock market such as the low
unemployment rate speaking publicly Trump allies dismissed the worries of
economic forecasters who call events like Tuesday's 700 point drop in the Dow
Jones average followed by another temporary dive on Thursday after markets
were closed Wednesday a sign of things to come any time you see the stock
market fall by 1400 points in two days there is lots of nervousness said
Stephen Moore a distinguished visiting fellow at the Heritage Foundation and
informal economic adviser to the 2016 Trump campaign but the economy is
fundamentally strong in terms of construction manufacturing and corporate
earnings I don't think they're worried about the recession I am amazed at this
many wave of recessionary pessimism that has
the media National Economic Council director Larry Kudlow said at a recent
Wall Street Journal event the evidence is quite different than these
speculations we are humming but many economic analysts also predict
the recent economic boom will soon fizzle with growth plunging below two
percent by 2020 according to an analysis by S&P chief u-s economists bath hanbô
Fino currently the economy is growing at a rate of 3.5% that squares with
cyclically trends suggesting the u.s is due for an economic downturn soon
Friday's job numbers provided little reassurance with the Labor Department
reporting that employers added 155 thousand jobs last month a figure well
below expectations of 198,000 compounding the worry is Trump's trade
showdown with China which poses a risk to the global economy over dinner at
last weekend's g20 summit Trump and Chinese President Xi Jinping agreed to
pause the rescue letting trade fight for 90 days as they search for a long-term
agreement but since then Trump has shaken markets with bellicose trade talk
that means stress for Trump aids and allies planning a 2020 message they hope
to build in part around economic growth and greater prosperity for Americans
former presidents Ronald Reagan Bill Clinton and to a lesser degree Barack
Obama all vaulted to re-election with their help of a growing economy the last
one term president the late George H W Bush is widely considered to have been
doomed by recession which struck midway through his tenure while top officials
like Treasury secretary Stephen Nunn should argue that gross domestic product
and inflation are the most important metrics to track and that those figures
remain healthy other advisors say voters are focused on more tangible indicators
including wages unemployment in the housing and stock markets they know it
could be a very dangerous situation if the market volatility is hurting workers
in key battleground states through their pensions investments
it said one republican close to the white house the concern is probably at a
DEFCON 3 at this point but it will definitely spike in 2019 if there's no
real solution to the trade dispute with China during this 90-day period
part of the problem for a president obsessed with the stock market is that
no one can pinpoint what exactly is causing the drops uncertainty about
trade deals fear about rising debt or slowing economic growth Trump himself
appears to be prepping for a slowdown by identifying scapegoats chief among them
for the moment his Federal Reserve Chairman Jay Powell just last week Trump
blamed the independent Fed for the drop in the stock market as well as a recent
plan closing announcement by General Motors speaking to The Washington Post
Trump said he was not even a little bit happy with Powell whom he nominated
surround the fed Trump is more strategic about setting up the assignment of blame
than people give him credit for said a second Republican close to the White
House when asked about the attacks on Powell other advisers expect Trump to
contain be blaming Democrats for recent market weakness as he and his aides did
in the run-up to last month's midterm elections one likely target is a
presumed incoming House Speaker Nancy Pelosi who was far better known than
Powell to Americans beyond Washington added to the scapegoat list will be any
departing cabinet or top White House officials said a Republican close to the
White House he's going to blame Commerce Secretary Wilbur Ross for some of these
problems once Ross leaves said the Republican and if any of his advisers
walk he'll blame them too some officials are desperately hoping for a trade deal
with China so the tariffs do not loom over consumers and companies just as the
front begins raises rates as expected and as economic growth begins to slow
but there are no guarantees that China Hawks within the administration who
scoff at Wall Street's market-driven concerns about the trade fight won't
carry the day officials are heartened however by the
thought that a real estate developer turned politician like Trump takes the
state of the economy personally it's not just a talking
point for re-election but one about his legacy said one former senior
administration official the president wants to be able to say I handled the
economy better than Obama Dave I
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