President Trump Donald John TrumpIlhan Omar defends Cummings after Trump attack: He & # 39; s wanting to distract with his racism & # 39; Donald Trump: The Great Divider & # 39; De Blasio: Democratic debates should address why we lost and what we do differently [more] reckon with the Federal Reserve and renewed trade talks with China to help US power through an economic obstacle course that can hinder his way to re-election.
Trump's campaign for another period largely hinges on the strength of the US economy and its ability to claim credit for it.
This mission became more challenging on Friday when the Department of Commerce released new figures showing gross domestic product (GDP) slowed from a pace of 3.1
Trump tweeted a lukewarm acknowledgment of the GDP report, but he blamed Fed's rate hikes in 2018.
"Not bad considering that we have heavy weight of the Federal Reserve anchor wrapped around our neck," Trump twittered and scratched his well-worn snout at the central bank.
While a upswing global economic forecast and increased damage from Trump's trade war has taken its toll on US businesses, there are still reasons for economic optimism on the way into 2020: Both the labor market and consumer spending record historically strong numbers, leading to robust employment and low unemployment.
But with global risks rising and US companies starting to support potential economic pitfalls, China and the Fed can have strong implications for the economy moving into a decisive election year.
The Fed is scheduled to hold its next monthly political meeting on Tuesday and Wednesday, and policy makers are almost certain to cut interest rates. At about the same time, top US and Chinese officials will meet in Shanghai to revive talks aimed at ending the longstanding commercial war between the world's two largest economies.
Beth Ann Bovino, chief economist at S&P Global, said that a Fed cutback would be blessed for US consumers. But lowering loan costs, she said, may not be enough to eliminate trade-related anxiety and other foreign headwinds.
"When we look at some of the business and investment readings, it seems that they are a little more cautious and reluctant to open up their wallets," Bovino said. "Yes, sure, the Fed fills out the boxes, but how many Drinking? ”
Throughout his presidential campaign in 2016, Trump promised that the US economy would grow 3 to 4 percent every year during his watch. Economists across the political spectrum doubted that the economy could sustain that expansion and they were justified on Friday When revised government figures showed that GDP expanded 2.5 percent in 2018. Tax cuts fuel in 2017 and federal spending boosted last year's growth, but the $ 1.5 trillion tax burden on GOP has not led to the level of business investment as many. Fed chairman Jerome Powell and his colleagues have expressed concern about the fading of business expenses and potential deeper losses triggered by Trump's Allies. problems in Europe and China.
"When businesses become uncertain about the future and about future demand," Powell told lawmakers on July 10, "they may decide to wait until they build something or buy something, and they can only Reserve. "
" It's no perfect way to identify these things, "Powell added. "But we connect it with commercial policy uncertainty, and also uncertainty about global growth and weak industry around the world."
A Fed interest rate cut this week may boost the skeptical US business, but it will be up to Trump to reassure the tensions that aroused much of their anxiety.
While Washington and Beijing have agreed to hold on to customs while resuming trade talks, it is unclear whether both nations will reach an agreement.
Larry Kudlow Lawrence (Larry) Alan Kudlow MORE president's chief financial advisor, set low expectations for the upcoming trade talks and said the goal was only to "reset the scene" after the negotiations collapsed in May .
Kudlow told CNBC's "Squawk on the Street" on Friday.
The corporate advocates made it clear that they want to see results, and that their patience with the turmoil goes thin.
"Weak business investment is a significant feature of economic growth, and this needs to be reversed rapidly," said Karen Kerrigan, president and CEO of the Small Business and Entrepreneurship Council, which advocates business-friendly policies.  "Clearly the effect of trade policy and tariffs takes its toll and undermines growth. "