President Donald Trump has dismissed warnings that the US could be close to a recession, insisting the economy is doing “tremendously well”.
Last week, financial markets indicated a recession - when an economy shrinks for two consecutive quarters - could be on the cards, when it became cheaper for the US government to borrow for ten years, rather than two.
As the BBC points out, this phenomenon - known as an “inverted yield curve” - is frequently a harbinger of recession, or at least a significant slowdown in economic growth.
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Furthermore, a study released yesterday showed that a majority of economists polled by the National Association for Business Economists expect a recession in the US within the next two years.
The economists “have previously expressed concern that Trump’s tariffs and higher budget deficits could eventually dampen the economy”, the Associated Press reports.
However, the US president was having none of it, telling reporters: “I don't see a recession. The world is in recession right now.
“We're doing tremendously well, our consumers are rich, I gave a tremendous tax cut, and they're loaded up with money.”
He added: “Most economists actually say we are not going to have a recession. Most of them are saying we will not have a recession, but the rest of the world is not doing well like we are doing.”
The New York Times says that Trump has privately expressed concerns that opponents are exaggerating the prospects of an economic slump to damage his re-election chances.
Earlier, the White House’s economic adviser, Larry Kudlow, had insisted that there was “no recession in sight”.
Kudlow added: “Consumers are working. Their wages are rising. They are spending and they are saving.”
Whether imminent or not, many believe a downturn is inevitable if Trump continues to back punishing trade tariffs on major US trade partners like China and the EU.
Writing for The Independent, Max Burns argues that “the US is being pushed towards recession – and it's totally unclear whether Trump understands what he's done”.
