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Wall Street sees the risk of the recession increasing




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                  President Donald Trump has gone from boasting stock market gains to blaming the Federal Reserve for recent falls and softness in the economy. | Richard Drew / AP Photo </p>
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Finance & Tax

Shares slip and fear of slowdown increases as Trump ramp up his reelection efforts

Over the last few days, economists at Goldman Sachs, Morgan Stanley and Bank of America have all warned that Trump's bitter trade war with China is taking a larger chunk of economic growth than expected.

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The warnings came as the shares suffered another major dip Monday with Dow closing nearly 400 points g, or 1.5 percent. The blue-chip index closed at 25,897, over 700 points lower than it was in January 2018 before Trump's trade campaign began in earnest.

The collective wisdom that is now spreading across Wall Street is that no trade agreement will be signed with China until the 2020 elections; business investment will continue to decline; And a series of interest rate cuts from the Federal Reserve won't be enough to get more growth out of an economy now in its tenth year of expansion – the longest stretch in American history.

"It makes sense for everyone to be downgraded because everyone assumed we would now have some kind of trade agreement with China, and we don't," said Megan Greene, an economist and senior staff member at Harvard's Kennedy School of Government. [19659007] "And now we have the risk of the trade war turning into a currency war," she said. "The consumer is still quite strong, but business investment looks very poor, and if it were to pick up again it would now."