Economists have for a long time been predicting a looming economic recession, but now it seems that their predictions are coming to pass. For the first time since the beginning of the 2008 recession, an early predictor for the downfall was witnessed on Wednesday.
The sell-off that occurred on Wednesday was caused by an inverted yield curve, which is a unique occurrence in the bond market, usually leading to a recession. It is still early to determine whether there is any cause for alarm, but one of the significant issues is that leaders are not concerned about it.
According to a statement by President Trump, there is no need to worry since the economy is still growing. The US is not the only country that is facing a slow down since China is also experiencing a slowed down growth due to the growing trade war with the US.
Chris Rupkey, who is the chief financial economist at MUFG Bank, said that the current climate signifies that the economy is going towards a considerable slowdown. He said that the “inverted yield curve” is just another sign that confirms that a recession has almost begun, which is why investors are running.
Some of the officials in the White House have shown a growing concern that the economy could weaken further, but unfortunately, no one is doing anything to help the situation. If anything. Trump and his advisors seem to be in the wrong side of the issue, seeing that lately he has been seen blaming the Federal Reserve. According to Trump’s Twitter, the Federal Reserve raised things too much. Too quickly hence, the need to slow down. He said that while China is still a problem, the Fed is the more significant issue.