Trump's policies threaten the world .. Will we witness an economic recession in America soon?

This week, talk of a recession has become popular among Americans, as US government bonds indicate that the economy may be heading for a possible recession. In the event of an economic recession, it will be months later; coinciding with weak data from Germany and China is alarming.

The rate of two-year US Treasury yields was higher than the 10-year US Treasury yield, which is rare, writer Shane Cratcher said in his Newsweek magazine report.

In fact, it was the last time the yield curve was turned upside down in the run-up to the country's previous financial meltdown.

The author said that the high demand for long-term treasury bonds would allow the government to borrow at low interest rates. Short-term bond prices are usually low as investors consider it a less risky option.

Kathy Postjansic, chief US financial economist at Oxford University, said the reversal of the yield curve is a key economic indicator of changes in business cycles, meaning that during this stage it will be a key indicator of a recession.

Postjansic added that the reversal of the yield curve helped to predict the last nine recessions in the country, while providing only a false forecast during the 1960s. In contrast, the recession is not necessarily imminent as it can range from 10.5 months to 36 Months.

The odds are strong
Although the Oxford University of Economics has not made official forecasts, it estimated that the likelihood of a recession in 2020 will be as high as 40%, which is fairly high, suggesting that the decline is likely to be During the presidential campaign.

Recession occurs after gross domestic product (GDP) grows negatively between two consecutive quarters.

The writer pointed out that the slowdown in the global economy is the main reason that irritates investors.

In fact, weak economic data from Germany and China is a alarm bell.

Moreover, the escalating trade war between China and the United States, which has taken on an upward trend, is a concern for investors.

Although interest rates are low in the US, they remain the best destination for investors compared to anywhere else. For example, some German bonds include negative interest rates, which means that investors are losing their money to hold them.

Trade war is a danger to America
Donald Trump's trade war with China threatens the US economy.

Although talks are still underway, Trump has signaled he will go ahead with a new 10 percent tariff on Chinese goods worth $ 300 billion in September. In addition, tariffs will be imposed on some goods during December.

"Financial markets will suffer if this trade war is not reversed, especially in light of the slowdown in global growth. In general, signs within the United States indicate that growth is slowing down, which we have long anticipated," said Postjansic.

Bad data
GDP growth is slowing, the writer said. In the first quarter of 2019, the economy grew by 3.1%. In the next quarter, growth was 2.1%, while the Congressional Budget Office expects the full 2019 growth to be 2.3%, down from 2.9% in 2018.

In addition, other recent data on stockpile accumulation - meaning companies are storing goods and materials instead of buying them later - and slowing sales of private companies, suggest that the economy is starting to decline.

Capital Economics considers a recession in the United States to be one in three, according to a Newsweek report.

The global manufacturing sector is in recession, he said. "Manufacturing sectors around the world are declining, including in the United States, Germany and China," he said.

Other positions
Neil Schering, chief economist at Capital Economics, was not worried about trade wars because exports are only a small part of the US economy, accounting for about 12 percent of it, while imports - affected by retaliatory tariffs - are about 15 percent.

Former Federal Reserve Chairman Janet Yellen said she did not think the United States would slide into recession, despite the reversal of the Treasury yield curve, according to a Newsweek magazine report.

WASHINGTON (Reuters) - US President George W. Bush held a conference call on Wednesday with the heads of three major banks on Wall Street as financial markets were in turmoil, Reuters quoted an informed source as saying. The banks are JPMorgan Chase & Co., Bank of America and Citigroup.

Global markets suffered turmoil this week as investors worried about the risk of recession and trade tensions between the United States and China.

To address investor concerns, Trump again called on the Federal Reserve Chairman to further cut interest rates, as countries around the world cut rates. On another occasion, he said the central bank was slow to change monetary policy and called for swift action.

The position was supported by Neil Kashkari, president of the Federal Reserve Bank of Minneapolis today, who suggested that the Federal Reserve needs to cut interest rates and take effective measures to address the economic slowdown, according to Reuters.