President Donald Trump said on Thursday that the economy will “go down the tubes” unless he wins in 2020, Mediaite reports.
The president suggested to members of the media that he is largely responsible for the state of the economy, taking a jab at former President Barack Obama.
“We picked up tremendous steam the day after the election,” he began.
“That’s not attributable to President Obama,” he added, pushing back against claims that he had inherited the Obama administration’s strong economy.
“The fact that I won lifted our economy greatly. If I didn’t win, it would go down,” he said, before predicting that him losing in 2020 would cause a recession.
“If I didn’t win, it would go down,” Trump said.
“Frankly, if for some reason that happened in the 2020 election, you’ll see this economy go down the tubes. I will tell you that right now.”
Trump also suggested that the Federal Reserve is to blame for where the economy appears to be headed, arguing — as he had in the past — that Chair of the Federal Reserve Jerome Powell needs to cut interest rates in order for the United States to avoid an economic crash.
“Jay Powell has made a big mistake. He raised them too fast, and he also quantitative tightened, did quantitative tighten that was a big mistake,” he said.
The president’s remarks come amid growing fears of an incoming recession. As Vox reported, on August 14, in what is considered a major recession warning, the yield curve inverted.
As the publication explained, the yield curve inverting indicates that investors are losing confidence in the market, and forecasting that “something unusual” will happen. Historically, the yield curve has been a strong indicator of recession, and almost every time it has inverted a recession has followed.
Some experts have, however, suggested that the inversion could be a false alarm.
— The Hill (@thehill) August 15, 2019
According to CNBC, former Federal Reserve Chair Janet Yellen suggested on Wednesday that the United States is “most likely not” heading toward a recession, arguing that the American economy is currently strong enough to avoid a significant decline.
According to The Financial Times, although this is the first time the yield curve has inverted since 2007, a recession is not imminent. The U.S. economy is relatively strong, according to the publication, with its weakest spot being the manufacturing sector, which is growing at a slow place.
Furthermore, although an inverted yield curve is a warning sign, that does not mean the U.S. will fall into recession soon; that could take up to three years, according to analysts at Deutsche Bank.
According to Politico, economic forecast models have predicted that Trump is on track to win a second term, but a sharp decline in economic growth could significantly decrease his re-election chances.