Amid the uncertainty of President Donald Trump's trade negotiations with China, the president's economic adviser Stephen Moore expects "rough sledding for a number of months," but he remains optimistic on the long term prospects of the Trump economy.
"We do have a lot of uncertainty about where this trade deal is going with China – I believe that Donald Trump is fighting the good fight," Moore told "The Cats Roundtable" on 970 AM-N.Y.
"If Trump can get this trade deal done, I think you're looking at Dow 30,000. You're going to see a nice boost in the market. It has been very tough sledding, and Donald Trump has been getting frustrated with the pace of progress."
Moore advises investors to not sell in a down market and President Trump to keep pushing for the trade deal with China that is right and benefits both countries.
"I do not want Donald Trump to capitulate here," Moore told host John Catsimatidis. "I think it's really important that we get a deal with China that's in America's interest. I don't think that Trump will cave-in. I think he will drive a hard bargain."
Ultimately, it will be in China's best interests to make a deal, Moore concluded.
"The question really is how much pain is China willing to tolerate here?" Moore said. "These tariffs are really hurting China, and I believe they could go into a recession. And China hasn't not had a recession in 30 years.
"There is a lot of outmigration of investment in China. People are divesting in China."
As for the U.S.'s own economic recession fears, Moore reiterated his blame on the Federal Reserve's monetary policy.
"The Fed is just too tight," he said. "The Fed has to get more dollar liquidity into the economy because the economy's growing. Everybody wants to invest in America. The dollar is too strong, and that has caused interest rates to go lower.
"I'm in agreement with Donald J. Trump — that we need another couple of rate cuts to provide the kind of liquidity and juice for the economy to keep it growing at 3%."
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