Concerns regarding the prospects of a recession were sparked last week, when the yield curve in the US bond market inverted – often an indicator signalling an impending recession or significant slowdown in economic growth.
US President Donald Trump has claimed in private conversations that his opponents are hatching a conspiracy against him to distort economic data, thus scuppering his chances of re-election in 2020, The New York Times reported on Sunday.
Sources familiar with the matter, speaking on condition of anonymity, revealed that the president had told aides and allies that his opponents were out to undermine one of his key strengths in the 2020 election campaign – the health of the economy during his tenure.
Acting on news reports and warnings by economists of a looming recession, the president reportedly privately claimed that “forces that do not want him to win” have been amplifying the negative impact sustained by the world economy as a result of his trade war, says the report.
The president also blamed critics for data published in tweets and public statements, claiming last week that “the Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election”.
In a tweet message on Sunday, Trump hailed the strength of the US economy, claiming it was outperforming other economies.
”The rest of the world, if you look at Germany, if you look at European Union, frankly, look at the UK — I mean, look at a lot of countries — they’re not doing well. China is doing poorly. Parts of Asia are doing poorly. We are doing better than any country, or even area, anywhere in the world”, Trump added.
Last week, yields on 10-year US Treasury bonds dipped below the yield on US 2-year bonds – the first time the 10-year yield has been below the 2-year one since 2007.
In another concerning sign, the yield on the 30-Year US Treasuries fell to a record low of about 2.01%.
On news of the yield curve inversion, the US stock market plunged on Wednesday.
The yield curve is said to be an indicator that often points to a coming recession or significant slowdown in economic growth.
The news comes amid a slowdown in major economies around the world, including China and Germany, with some of the developments blamed by economists on Trump’s trade war, according to the publication.
Yet some of the US president’s economic advisers believe the prospects of a recession are being exaggerated, and sales, employment figures, and other data testify to the enduring strength of the US economy.
Indeed, average earnings rose 3.2% during the year to July, while nonfarm payrolls increased by 164,000 jobs in that month.
“There is no recession in sight. Consumers are working. Their wages are rising. They are spending and they are saving”, White House Economic Adviser Larry Kudlow said on Fox News Sunday.