Federal Reserve Chairman Jerome Powell told the press the great unemployment numbers prove there’s no need for another interest rate cut. The Feds think another rate cut would give consumers the green light to borrow more money. Consumer debt continues to increase thanks to reports that claim the economy is in great shape.
But when economists look under the economic hood, there are several issues that could bring consumer spending down and upset stock market investors. The stop market thrives on Trump’s false claims, so the big hedge fund managers think betting on a stock market decline in 2020 is the best way to grow assets. Bridgewater, the largest hedge fund in the world, bet Goldman Sachs $1 billion the stock market will tank by April 2020.
The global economy is not in good shape. Europe’s Central Bank Chief thinks GDP growth will shrink to three percent at the end of the year. And U.S. economists say America’s growth will drop below two percent at the end of December. Manufacturing took a beating when Trump started his trade war. Supply chains that functioned effectively for years got hammered when American importers went to other countries like Viet Nam, Cambodia, and Thailand to avoid the tariffs.
The American tech industry is still in the process of dealing with the Huawei business ban. Telecom companies that serve rural areas must remove Huawei products, and replace them with American products, according to the FCC. The FCC canceled the $5 billion grant that would allow rural service providers the funds they needed to use Huawei’s technology.
Mr. Trump wants to make an example out of Huawei and ZTE. Mr. Trump’s main goal is to use Huawei’s ban as a bargaining chip when the trade talks turn to the tech piece of the trade battle. Mr. Trump also wants to stop Huawei’s 5G technology growth. The giant Chinese tech company continues to sell its products and services to other countries. None of those countries claim Huawei embedded spy technology in its products.
Ren Zhengfei, the co-founder and CEO of the company, told the press he doesn’t need U.S. business to hit his revenue projections. He plans to move his research center to Canada, and he wants to stop using Google’s Android operating system. Zhengfei’s company developed Harmony an operating system that made its debut in China this year in the company’s TVs. Ren told the press the company will still use android in tablets and phones next year unless Trump tightens the revenue noose Trump put around his company’s neck.
