Yesterday, after last weeks tumultuous events, Donald Trump and his senior advisers were giving bullish statements to news outlets about the current state of the US economy. Trump told reporters that he does not see any sort of recession on the horizon stating ‘We’re doing tremendously well. Our consumers are rich. I gave a tremendous tax cut and they’re loaded up with money. In separate interviews, the director of the National Economic Council, Larry Kudlow and Peter Navarro, the director of the White House Office of Trade and Manufacturing Policy also gave similarly upbeat projections about the economy.
Kudlow told NBC's Meet the Press that people should not be ‘afraid of optimism’ adding that he believes the US is ‘doing pretty darn well, in my opinion’. Kudlow pointed to several factors that give rise to his optimism. These included the high employment rate, rising wages, increases in household savings and low interest rates. Navarro was also on point telling ABC's This Week ‘What I can tell you with certainty is that we're going to have a strong economy through 2020 and beyond with a bull market’.
On this side of the pond we also heard from Olaf Scholz, Germany's Finance Minister, who said that Germany has the fiscal strength to stave off any future economic shocks ‘with full force’, hinting that Germany could muster EUR50bn of extra spending in an economic crisis. This is the first time he has put a number on any possible fiscal stimulus. Although Scholz acknowledged there was fiscal leeway, he believes at this time such action is not imminent. The figure of EUR50bn comes what Scholz believes the financial crisis in 2008/2009 cost Germany saying ‘And we have to be able to muster that sum of money. And we can muster that. That’s the good news’. Although any fiscal stimulus is not in the offing, Scholz acknowledged the headwinds facing the German economy. He said that currently the German economy was suffering from a drop in demand from its export markets as well as the heightened uncertainty due to trade disputes and global growth.