According to some financial experts, President Trump should easily win the 2020 election because of one factor: the strength of the economy.
The experts quoted by Politico said that if history is a reliable guide, the fact that the economy has flourished during Trump’s tenure should be the overriding element in voter’s decision as to whom to vote for in 2020. The economy is sailing along on rising wages and low gas prices, as well as low unemployment. Donald Luskin, chief investment officer of TrendMacrolytics, which predicted Trump’s 2016 victory, opined, “The economy is just so damn strong right now and by all historic precedent the incumbent should run away with it.” He was sanguine about any problems with the economy that might arise between now and November 2020, adding, “It would have to slow a lot to still be not pretty good.”
Luskin was echoed by Yale economist Ray Fair, whose economic model also predicted Trump’s 2016 victory. He stated, “Even if you have a mediocre but not great economy — and that’s more or less consensus for between now and the election — that has a Trump victory and by a not-trivial margin.” He said that in the current economy, Trump would get 54% of the vote.
A third expert, Mark Zandi, chief economist at Moody’s Analytics, who is not a fan of Trump, has used 12 different economic models to try to ascertain who would win in 2020; he said Trump won in all 12, winning most of them easily. He asserted, “If the election were held today, Trump would win according to the models and pretty handily. In three or four of them it would be pretty close. He’s got low gas prices, low unemployment and a lot of other political variables at his back. The only exception is his popularity, which matters a lot. If that falls off a cliff it would make a big difference.”
What might help Trump even more is the Fed’s acknowledgment that it will eschew raising interest rates, which the Fed announced on Wednesday. President Trump has been critical of the Fed for some time for raising interest rates consistently during his tenure and thus impeding economic growth; he said last October, after the Fed raised interest rates again, “I think the Fed is making a mistake. They are so tight. I think the Fed has gone crazy.”
Fox News reported on Thursday, “On Wednesday, during its second monetary policy meeting of the year, the Fed voted to hold the benchmark federal funds rate steady. The Federal Open Committee unanimously agreed to keep interest rates unchanged at a target range of 2.25 percent to 2.5 percent. The policy setting board also signaled it won’t see any future rate hikes this year.”
On Thursday, Trump took aim at the Fed, telling Fox Business’ Maria Bartiromo that even with the economy roaring along with an estimated 3.1% GDP, it would have been doing even better if the Fed would ease its quantitative money policy and stop raising interest rates. He said, “The world is slowing, but we’re not slowing. And frankly, if we didn’t have somebody that would raise interest rates and do quantitative tightening, we would have been at over 4 [percent] instead of at 3.1 [percent].” Trump also said his comments regarding the Fed’s prior hiking of interest rates were not responsible for the Fed’s decision to stop, adding, “I hope I didn’t influence, frankly, but it doesn’t matter. I don’t care if I influenced or not. One thing, I was right. But we would be over four [percent] if they didn’t do all of the interest rate hikes, and they tightened. They did $50 billion a month. I said, ‘What are we doing here?’”
On Friday, President Trump celebrated the current status of the nation’s GDP, tweeting, “3.1 GDP FOR THE YEAR. BEST NUMBER IN 14 YEARS!”