The recession and fears of it seem to be the upcoming reality. The anxiety about the possible recession hitting the US early next year appears to be a reality. Given the fact that President Trump is all set seek re-election based on a strong economy, it can be a real trouble for Trump.
There have been fears of recession raised by most of the reputed firms in the Wall Street. The renowned finance institutes like Bank of America, Goldman Sachs and Moody’s Analytics have been raising concerns over the past few weeks about the recession being quite likely before the election next year. Moreover, to sum it up all, everyone is blaming the trade policy put forth by the Trump administration.
There are several reasons that have been pointing towards the possibility of a recession quite soon. Falling stocks, raising concerns about the ongoing trade wars and a treasury that is staring at the bleak future are the three major reasons that appear to be making it a possibility.
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The major effect is expected to be from the trade war with China. Goldman Sachs claims that the effects can be more pronounced than what was predicted previously. The economists at the bank of America have been claiming that the chances of a recession have risen from the 20 percent mark to a whopping 33 percent. The possibility of spiralling tensions in the US-China trade relations will further fan this possibility. Bank of America foresees that these tensions can develop to be causing more downward risk for the US economy as a whole.
The only hope as things stand as of now would be to bring about a quick trade agreement between the two countries. Even when the Trump administration may not get everything it wants, there would be a chance of getting back to a normal economy instead of staring into the recession. That would also help Trump seek a re-election.