4th bank in a week is sounding the alarm bells: Trump is leading us close to a recession
Big banks are raising red flags about a looming recession in the United States, citing Trump's trade war with China as the major factor.
In the last week, Bank of America, Morgan Stanley, Goldman Sachs, and UBS have all warned that Trump's actions with China are hurting the U.S. economy and pushing the country, and even the entire globe, into a recession.
Morgan Stanley on Aug. 5 predicted that a recession will start in just nine months if Trump follows through on his pledge to add a 25% tariff (tax) on all goods from China.
"Trade tensions have pushed corporate confidence and global growth to multi-year lows," Chetan Ahya, Morgan Stanley's chief economist, said.
In an analysis published Friday, Aug. 9, Bank of America raised their odds of a recession in the next year from a 1-in-5 chance to a 1-in-3, and stated their model "likely does not fully capture the threat of US-China trade tensions spiraling into a more severe trade war, which we view as the biggest downside risk for the US economy."
"Fears that the trade war will trigger a recession are growing," Jan Hatzius, Goldman Sachs' chief economist, announced on Sunday. He also predicted that Trump's economic battle with China will cause America's economic growth to falter at the end of 2019.
On Tuesday morning, UBS said it anticipates both a slowdown in job growth as well as an increase in unemployment. In June, UBS warned that if trade tensions between the U.S. and China did not cool, "the contours would resemble a mild 'global recession.'"
The warnings come days after Trump announced a 10% tariff on Chinese goods starting September 1. The White House has since changed course, announcing that the U.S. will delay the start of tariffs on Chinese goods until mid-December.
Before the White House announced a delay in the new tariffs, economists questioned if and when the trade war could end.
"I'm very skeptical that the two sides will come to a deal before the 2020 election," said Meredith Crowley, a Cambridge University economist, told NBC News on Monday.
Trump's trade war with China has already had devastating effects for American farmers. In retaliation for Trump's tariffs, China first reduced and then completely eliminated purchases of U.S. agricultural products.
Mark Zandi, chief economist at Moody's Analytics, estimated Trump's trade war has already cost the U.S. economy 300,000 jobs.
There's no telling how much more damage he will do before it all ends.
Published with permission of The American Independent. Attribution: Dan Desai Martin.