A request made by Donald Trump to the Federal Reserve to enact a substantial interest rate cut, could confirm the opinion of economists of the National Association for Business Economics, who estimate that the United States is on the verge of an economic recession.
On Twitter, President Donald Trump asked the Fed to cut its benchmark interest by one percentage point, a measure that, according to experts, is only considered in cases where the economy is on the verge of recession.
Trump wrote that “The Fed rate on a fairly short period of time should be reduced by at least 100 basis points, with perhaps some quantitative easing.”
Economists who have reviewed the White House petition believe that Trump’s reference to “quantitative easing” seems to refer to the resumption of the bond buying program that the Fed maintained for nearly a decade after the 2008 financial crisis to put money into the system until the end of 2014 while facing a healthy recovery.
“If that happened, our economy would be even better, and the world economy would be greatly and quickly enhanced, good for everyone,” the president affirmed, and added that the dollar “is so strong that it is sadly hurting other parts of the world.”
Last week, financial markets shook in the US as an “inverted curve” of yields was registered in the government bond market, a phenomenon that has preceded a number of previous recessions and generated investing unease.
However, Trump said on Sunday that he does not believe a recession is coming because consumers are “loaded up with money,” and attributed some of those fears to an attempt by Democrats to seize power in next year’s elections.
“Our economy is very strong, despite the horrendous lack of vision by Jay Powell and the Fed, but the Democrats are trying to ‘will’ the economy to be bad for purposes of the 2020 election. Very selfish,” insisted on another Tweet post
Trump’s ambitious request, which calls on the Fed to cut the unprecedented interest rate since the 2008 financial crisis, occurred three days before the Jackson Hole Economic Policy Symposium in, Wyoming.
Powell will address the forum next Friday, and is expected to provide more details on his plans for the Fed, which this month undertook its first interest rate cut in ten years, after months of Trump´s pressure.
With this scenario, it should not be overlooked that experts working corporations and trade associations of the nation and who were surveyed between July 14 and August 1 and are paid as economists of the National Association for Business Economics, predicted an imminent recession will affect the United States and is expected by just over a third of professionals consulted.
Economists expressed concern that President Trump’s tariffs and larger budget deficits could hurt the economy.
The recession forecast is expected by 2021, according to an exclusive material published by The Associated Press.
Translated by: José Espinoza
Noticias Newswire
