Tags: martin feldstein | recession | economy | fragile

Harvard's Feldstein: Recession Could Jolt Fragile Economy

Harvard's Feldstein: Recession Could Jolt Fragile Economy
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By    |   Thursday, 19 July 2018 05:00 PM

Harvard Economist Martin Feldstein warns savvy investors that a recession could possibly derail the seemingly endless bull stock-market rally.

“I think [the economy] is fragile because of the level of asset prices. And if the economy turns down, the Fed has no tools to offset that,” the former Reagan economic adviser told Fox Business Network.

He contends that the economy is in good shape because of low unemployment and inflation, but despite that, it is still very fragile.

Feldstein said he’s worried that the Fed has not been preparing during the past few years for a future recession.

“The Fed made a mistake by not starting several years ago to push up the short rate,” he said, “I think the loan rate is going to rise not just because the Fed is tightening, but because everybody sees these large fiscal deficits coming along.

However, White House economic adviser Larry Kudlow said Wednesday that "there's no recession in sight" for the American economy and that President Donald Trump "is on the right track" with his economic agenda.

"There's no recession in sight," Kudlow, who also served in the Reagan administration, told CNBC's Jim Cramer at the cable network's Delivering Alpha conference in New York.

"The American economy is in very good shape," said Kudlow, who was blunt in that he doesn't sense any economic trouble on the horizion. "I don't see it," said Kudlow, who worked as Reagan’s budget deputy between 1981 and 1985.

Kudlow also predicted robut economic growth for the near future. "We are getting 3 [percent] and it may be 4 for a quarter or two," said Kudlow, who served as the Trump campaign's senior economic adviser. "That's all for the good. Literally millions more people are working."

Economists widely expect second-quarter growth to approach 4 percent after GDP rose 2 percent in the first quarter and 2.3 percent for all of Trump's first year in office in 2017, CNBC explained.

(Newsmax wire services contributed to this report).

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Harvard Economist Martin Feldstein warns savvy investors that a recession could possibly derail the seemingly endless bull stock-market rally.
martin feldstein, recession, economy, fragile
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2018-00-19
Thursday, 19 July 2018 05:00 PM
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