Spooked Trump insists US economy not in trouble

Wednesday, August 21, 2019

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WASHINGTON, United States (AFP) — President Donald Trump is so convinced that his re-election depends on the economy staying strong that the merest hint of recession has sent him into political crisis management mode.

Unpopular and with a middling record of legislative achievements, Trump enters the 2020 campaign season facing significant headwinds, except on the economy.

Growth has been on the upside for a decade now and Trump takes all the credit that he can for record low unemployment and what he repeatedly claims to be “the hottest” economy in the world.

But what he doesn't want to talk about is the bad news — and that's starting to accumulate.

An alarm bell went off in the US Treasury bond market last week when 10-year bond yields briefly fell below the yields offered on a two-year-bond — the inverse of what normally happens.

The so-called inverted yield curve is a statistical phenomenon that has previously been an accurate herald of eventual recession.

Add in growing fears of fallout from the US-China trade war and Germany's own recession warning, plus Britain's Brexit chaos, and suddenly the “R” word has become a regular part of the conversation.

Unless your name is Donald Trump.

In his world, there can be no economic shrinkage.

Just yesterday, he tweeted or retweeted more than a dozen boasts about the booming economy.

“#Trump has this Economy humming like a fine-tuned engine,” one of the retweets claimed, while crediting the president with “Superhuman-like Energy.”

Trump's aides have also been inundating the media with interviews where they repeat this same line.

“Let's not be afraid of optimism,” as White House economics guru Larry Kudlow said on Sunday.


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