After rising on Tuesday, stocks tumbled on Wednesday. The Dow Jones Industrial Average fell more than 700 points on news that major European economies might be headed for recession.
At home, American analysts and investors have been spooked by President Donald Trump’s ongoing trade war with China, which has raised uncertainty about future investment and clearly triggered broader fears about macroeconomic stability. Looming over these worries is the fact of the inverted yield curve: 10-year bonds are now offering lower interest rates than 2-year bonds, a sign that investors are scrambling for somewhere safe to keep their money long term.
Economist Paul Krugman argued Wednesday that, while the world doesn’t appear to be facing a repeat of the 2008 financial crisis, the risk of a recession is indeed rising. And despite his boasts about his economic performance, Trump himself appears to be driving at least one major factor in the increased risk, while the GOP blocks potentially countervailing measures.
View the complete August 14 article by Cody Fenwick on the AlterNet website here.