Trump, eco­nomic ad­viser dis­miss fears of re­ces­sion

The Morning Call - - NATION & WORLD - By Kevin Freking

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.

NI­CHOLAS KAMM/GETTY-AFP

Pres­i­dent Don­ald Trump speaks to the me­dia Sun­day be­fore board­ing Air Force One in Mor­ris­town, New Jersey.

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