Federal Reserve Chairman Powell let investors know interest rate cuts are over this year. Mr. Powell told a group of financial gurus the U.S. economy is in good shape. He said low unemployment and a less than two percent inflation rate proves the economy is still strong.
But Wall Street economists say the economy is not that great. Gross Domestic Product growth in the third quarter dropped below two percent. Economic growth was 3.2 percent in January. Plus, consumers have a mountain load of debt. Americans have mortgages, credit cards, student loans, and other financial obligations that amount to $14 trillion. That number is 25 percent higher than it was after the 2008 meltdown.
High consumer debt is just one of the flies in America’s economic ointment. Productivity continues to drop as the manufacturing sector of the economy tries to adjust to Trump’s trade war. Trump’s trade wars with China and Europe continue to cost Americans millions in tariff taxes.
Consumer confidence is not what it was at the beginning of the year. According to several news reports, Americans will pay $2,000 more in taxes in 2020 unless Trump drops the tariffs. And the budget deficit continues to grow thanks to Trump’s spending addiction.
Wall Street economists say those factors along with a weak global economy and other issues like Brexit and Trump’s sanctions will contribute to a U.S. recession in 2020. Europe’s Central Bank claims Germany is now in recession mode, and the U.K. could fall into the same mode before the end of the year.
But the issue most investors worry about is Trump’s impeachment. Mr. Trump’s Twitter addiction makes the stock market jump or fall depending on the substance of the Trumpster’s tweets. Even though most of Trump’s tweets aren’t facts they still have an impact on financial markets.
Mr. Trump claims the public impeachment process is another witch hunt. But the first day wasn’t a good day for the Trumpster. Two credible career diplomats told Congress Rudy and Trump tried to keep them out of the Zelensky debacle. Trump even fired Ukraine Ambassador Marie Yovanovitch because she tried to stop Giuliani from acting like a State Department official.
The Republicans decided to give Ohio Rep Jim Jordan a chance to make an ass of himself on national TV. Jacket-less Jordan looks like a Trump voter, so Trump’s fan base connects with the former assistant wrestling coach. Jordan keeps asking when the whistleblower will testify. He also claims all the facts Bill Taylor and George Kent revealed during the public impeachment hearing were just hearsay, so both men weren’t credible witnesses.