Projected economic plans from Donald Trump are “classic hyperbole” from the president, according to an analyst warning of future economic strife.
A claim made by the president that the stock market will contribute a massive growth boost to the economy has been debunked by CNNanalyst David Goldman, who says that a direct impact from the stock market on the economy will not work. Trump’s hope for lower interest rates from the new Federal Reserve chair were made clear by the president earlier this year.
Trump posted to Truth Social, “I want my new Fed Chairman to lower Interest Rates if the Market is doing well, not destroy the Market for no reason whatsoever.”
Goldman has since explained the new Fed chair, while possibly on Trump’s side when it comes to economic projections, will struggle with the “Trump hyperbole” dominating the economic discussion.
He wrote, “Trump claimed that a strong stock market could boost economic growth by up to 20% a year. That’s classic Trump hyperbole – the US economy has never grown by even 9% in a single year, and the fastest growth of the past four decades took place in 2021 – Biden’s first term – when the economy bounced back from the pandemic to surge 6.1%.”
“That’s also not how the economy works: The stock market itself doesn’t contribute much to economic growth – it boosts wealthier Americans’ net worth, but the market is more a reflection of investors’ predictions about where the economy is headed than an economic engine in its own right.”
Trump’s “general sentiment” was described as true by Goldman, though he did warn the Federal Reserve “doesn’t operate in the way Trump describes.”
Criticism of Trump’s administration and their handling of the economy has been frequent, with the Wall Street Journal sounding the alarm on impending economic trouble.
“You’re going to see a lot of wait and see,” chief executive of staffing company Kelly Services Chris Layden told the Journal. “Some of the looming uncertainty will mean that we’re going to continue to see an investment in capital over people.”
According to the report, “66 percent of leaders surveyed” at a recent gathering in Midtown Manhattan “said they planned to either fire workers or maintain the size of their existing teams next year. Only a third indicated they planned to hire.” This comes as the “unemployment rate those to 4.6 percent in November, its highest in four years.”
“We’re close to zero job growth. That’s not a healthy labor market,” Federal Reserve governor Christopher Waller said at the gathering. “When I go around and talk to CEOs around the country, everybody’s telling me, ‘Look, we’re not hiring because we’re waiting to try to figure out what happens with AI. What jobs can we replace? What jobs do we don’t?’”
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