Author Grant Williams predicts that Donald Trump appears doomed to inherit the next recession.
But before you fire off those nasty letters to the editor, Williams says it has nothing to do with Trump.
“He may be the unluckiest man in the world to win this job at this particular time,” Williams, the author of the research letter “Things That Make You Go Hmmm” and co-founder of RealVision Television, told Yahoo Finance.
“Because, we were for a long time, 7 years, without a recession in the US,” he continued. “We are overdue one. And some of the data that’s been coming out in the last couple of quarters suggests that we are very close to one,” Williams said.
“It seems to me at the grassroots the consumer is not doing too well. As goes consumption, so goes the U.S. economy. I think [Trump] definitely needs to be weary of this,” Williams said.
“Even though he has control of the House, control of Congress. It takes a while to get these things through. I would be surprised if, with the exception of a few token projects, they get anything up and running until the end of 2017,” he said, adding, “Realistically, people jumping in day one to buy copper, for example, up 6% because of this is a little too premature I think there’s too much uncertainty around this to place all of your bets right now.”
On election night, as it became clear that Trump would win, Dow Jones Industrial futures dropped 5%. Overnight, those futures roared back to finish the day up 6%.
“Any market that goes down 5% and up 6% on the same news is inherently unstable,” Williams said.
Williams isn't alone in mentioning "The Donald" and "recession" in the same sentence before the Trump era even officially starts.
The U.S. economy could face a recession as soon as 2020 even if lawmakers agree on a spending plan that stokes short-term growth, a top economic adviser to Pacific Investment Management Co. said.
Joachim Fels, global economic adviser for Pimco, said it remains unclear whether the policies proposed by President-elect Donald Trump will ramp up growth or rattle the economy.
"One of the strongest conclusions of Trumponomics: we don't know exactly whether Dr. Jekyll or Mr. Hyde wins - whether Trump the expansionist or Trump the protectionist - but what we do know is that under almost any scenario or mix of the two, you get higher inflation," Fels said at the Reuters Global Investment Outlook Summit in New York. "This is what the market has been playing already."
Naturally, those in the Trump camp caution that you can't always trust what academics say or write.
Newsmax Finance Insider and Trump adviser Stephen Moore seeks to prove that point by reminding us: "The Democrats and their gang of pundits assure us that 4 percent growth cannot and will not happen under President-elect Trump."
He also urged savvy investors: "But let's not forget: These are the same geniuses who have assured us for the last year that there would never be a President Trump. Wrong again," Moore wrote for Newsmax Finance.
"Trump will also bring an America-first, pro-business approach to economic policy. Having someone in the White House who knows how to run a business and meet a payroll has to be a psychological lift for this battered and bruised economy."
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