NO RECESSION IN SIGHT, WHITE HOUSE OFFICIALS INSIST.
WASHINGTON • White House officials pushed back on Sunday against concerns that economic growth may be faltering, saying they saw little risk of recession despite a volatile week on global bond markets, and insisting their trade war with China was doing no damage to the United States.
Trump administration economic adviser Larry Kudlow said trade deputies from the two countries would speak within 10 days and “if those deputies meetings pan out ... we are planning to have China come to the U.S.A.” to advance negotiations over ending a trade battle that has emerged as a potential risk to global economic growth.
But even with the talks stalled for now and the threat of greater tariffs and other trade restrictions hanging over the world economy, Kudlow said on Fox News Sunday that the United States remained “in pretty good shape.”
“There is no recession in sight,” Kudlow said. “Consumers are working. Their wages are rising. They are spending and they are saving.”
His comments followed a rocky week in which concerns about a possible U.S. recession began to drive financial markets and seemed to put administration officials on edge about whether the economy would hold up through the 2020 presidential election campaign. Democrats on Sunday argued Trump’s trade policies are now posing an acute, short-term risk.
U.S. stock markets tanked last week on recession fears with all three major U.S. indexes closing down about three per cent on Wednesday only to pair their losses by Friday due to expectations the European Central Bank might cut rates.
The Fed and 19 other central banks have already loosened monetary policy in what Fitch Ratings last week described as the largest shift since the 2009 recession.
Markets are expecting even more cuts to come. For a brief time last week bond investors demanded a higher interest rate on two-year Treasury bonds than for 10-year Treasury bonds, a potential signal of lost faith in near-term economic growth.
Much of the uncertainty surrounds prospects for a resolution of the trade tensions between the United States and China. President Donald Trump told reporters he had a call with China’s President Xi Jinping scheduled soon. It had not taken place as of Saturday night.