Some of President Donald Trump’s closest friends and former confidantes have come to realize that his best chances for winning re-election rest upon having a good economy when 2020 rolls by.
With bad economic news this week, signaling we could be heading toward a recession, concerns are being raised that even on that issue Trump may have difficulties convincing the American public he deserves a second term in office.
“I’m very worried about the latest economic data. A lot of us are concerned,” a source close to Trump told the news site Axios. “Without the narrative on the economy, he can’t win.”
Another former senior White House official lamented to the news agency that Trump is “running out of tools” to stave off a bad economic outcome. The tax cuts he implemented have done all that they can, and the Federal Reserve can’t stop a recession from happening.
Recession watch: What is an "inverted yield curve" and why does it matter? https://t.co/3YSVL4hjV3
— The Washington Post (@washingtonpost) August 14, 2019
Trump’s best bet is to garner a good outcome on a trade deal with China and other countries around the world. But so far, he’s not showing signs of relenting on the matter of his global trade strategy, which appears to rely on his blustering of unfair deals and tariffs.
“The consequences of further isolating ourselves from the world may turn out to be quite severe,” A former White House official said.
Economic data from Wednesday does indeed appear troubling. Several markets dropped significantly, including the Dow Jones Industrial Average, which fell by 800 points. Asian markets showed mixed results overnight, but as of press time the European markets showed a continued slump, which may affect Wall Street today.
The dire news caused #TrumpRecession to trend on Twitter — never a good sign for an incumbent president to see a year and some months out from Election Day.
Recession concerns came about after market analysts noted an inverted yield curve on U.S. bonds. CNBC reported. What does that mean? Essentially, when short-term bonds have higher yield percentages on their investments than do long-term bonds, it’s a signal to investors that a recession is imminent.
Such short-term bonds typically produce higher yields when they become more popular — a higher demand for such bonds strengthens them, which allows a higher yield to become possible. Conversely, a smaller number of investitures in long-term bonds signal that investors don’t have much confidence in the economy beyond around two years.