With the US economy booming it’s hard to imagine a recession but because other markets are not faring anywhere nearly as well, adverse speculation could impact the US.
Donald Trump has once again lashed out at the media, but this time to blame reporters for trying to tank the US economy in a conspiracy to deny him a second term in the White House.
The president’s attack comes after Mr Trump delayed imposing some further tariffs on China as the two countries engage in an ongoing trade war, and as some economists have warned of a looming recession that could drag down the president’s re-election prospects.
“The Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election,” Mr Trump said.”
The Independent UK
Trump’s recent tweets spell out what he thinks media are up to.
“The Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election. The problem they have is that the economy is way too strong and we will soon be winning big on Trade, and everyone knows that, including China!”
“If they don’t get this Trade Deal with the U.S. done, China could have it[s] first recession (or worse!) in years. There’s disinvestment in China right now. Also, the Fed is too tight (I agree).” Steve Moore, Heritage Foundation”
“Walmart, a great indicator as to how the U.S. is doing, just released outstanding numbers. Our Country, unlike others, is doing great! Don’t let the Fake News convince you otherwise.”
Twitter
The problem is that adverse speculation can fuel a financial downturn.
Markets around the world suffered after the spread between two-year and 10-year Treasury yields turned negative, a development that has historically preceded every U.S. recession in the past 50 years, though sometimes by a margin of 24 months.
Two of the world’s biggest economies, Germany and the United Kingdom, appear to be shrinking; China — which is embroiled in a year-long trade war with the U.S. — also seems to be teetering on the brink of a slowdown, and that’s excluding another wave of tariffs the U.S. will impose in mid-December.
Whether the events are truly foreshadowing a recession within the next year or merely a concerning economic contraction, however, is unclear.
Former Federal Reserve Chair Janet Yellen cautioned on Wednesday that she believed a recession is unlikely, suggesting the yield curve inversion as a reliable predictor could be wrong in this instance.”
Fox Business News
NZ media, as always, followed the lead of anti-Trump US media.
“The New Zealand share market has slipped in the wake of fears of a United States recession and a big drop on Wall Street.
But as is often the case, the response from local investors has not been as strong as seen in overseas markets so far.
The NZX 50 quickly dropped 1.4 per cent on Thursday morning before recovering some of that ground and was down 1.2 per cent in mid-afternoon trading.”
Stuff
As Trump well knows, speculation of doom and gloom can trigger a loss of confidence in the financial market, and rather than the facts dictating the outcome, media harbingers of doom could create a self-fulfilling prophecy.