Trump, economic adviser dismiss fears of recession
BERKELEY HEIGHTS, N.J. — President Donald Trump’s top economic adviser is playing down fears of a looming recession after last week’s sharp drop in the financial markets and predicting the economy will perform well in the second half of 2019.
Larry Kudlow said in Sunday television interviews that consumers are seeing higher wages and are able to spend and save more.
“No, I don’t see a recession,” Kudlow said. “We’re doing pretty darn well in my judgment. Let’s not be afraid of optimism.”
A strong economy is key to Trump’s reelection prospects. Consumer confidence has dropped 6.4% since July. The president has spent most of the week at his golf club in New Jersey with much of his tweeting focused on talking up the economy.
Kudlow acknowledged a slowing energy sector but said low interest rates will help housing, construction and auto sales.
Kudlow also defended the president’s use of tariffs on goods coming from China. Before he joined the administration, Kudlow was known for opposing tariffs and promoting free trade during his career as an economic analyst.
Kudlow said Trump has taught him and others that the “China story has to be changed and reformed.”
“We cannot let China pursue these unfair and unreciprocal trading practices,” Kudlow said.
Democratic presidential candidate Beto O’Rourke said the U.S. needed to work with allies to hold China accountable on trade. He said he fears Trump is driving the global economy into a recession.
“This current trade war that the president has entered our country into is not working,” O’Rourke said. “It is hammering the hell out of farmers across this country.”
Last month, the Federal Reserve reduced its benchmark rate — which affects many loans for households and businesses — by a quarter-point to a range of 2% to 2.25%. It’s the first rate cut since December 2008 during the depths of the Great Recession.
Federal Reserve Chairman Jerome Powell stressed that the Fed was worried about the consequences of Trump’s trade war and sluggish economies overseas.
“Weak global growth and trade tensions are having an effect on the U.S. economy,” he said.
Breaking with historical norms, Trump has been highly critical of Powell as he places blame for any economic weakness on the nation’s central bank for raising interest rates too much over the past two years.
President Donald Trump speaks to the media Sunday before boarding Air Force One in Morristown, New Jersey.