Ex-Trump Adviser: 'Odds of Global Recession Close to 100%'
'You’re going to have one really bad quarter,' Kevin Hassett warned
The former economic adviser to President Donald Trump said the world now appears to be on the brink of global recession as a result of the coronavirus pandemic.
The former White House Council of Economic Advisers Chairman Kevin Hassett told CNN:
“I think that the odds of a global recession are close to 100% right now."
“We just ran the numbers carefully over the weekend, and we think second quarter's going to be about minus 5%, and we think the jobs number in early April might be as much as minus a million or so because ... nobody is going to get hired next week," he said.
"You’re going to have one really bad quarter," Hassett warned.
"If you’re going to have a recession, then you've got to have two bad quarters, and I think that’s going to depend on whether we get ahead of the curve on the coronavirus, and that’s a big unknown right now.”
As NewsThud reported last week, Trump called on Congress to pass a payroll tax to ease the effects of the coronavirus on consumer spending.
But House Democrats are refusing to consider the President proposed payroll tax cuts designed to help stimulate the economy during the coronavirus outbreak.
The Hill reported after the worst day on Wall Street in more than a decade; Trump said he would ask Congress to pass an emergency economic package that includes both a payroll tax cut and relief for hourly workers to fight the economic fallout from the coronavirus.
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But Democrats argued that cutting the federal payroll tax would not help people who have lost their jobs in this sudden downturn, or who are part of the gig economy and do not get paid by the hour.
Meanwhile, the Federal Reserve lowered its interest rate target to zero in a move to protect the economy from the pandemic.
The cut was the second emergency action taken by the Fed as it scrambles to cushion the economic fallout caused by the COVID-19 outbreak.
Markets plunged to bear market territory last week, ending an 11-year bull run.
On Monday, U.S. stocks plunged, with the S&P 500 falling more than 7%, triggering a halt in trading at the New York Stock Exchange, and the Dow Jones Industrial Average dropped more than 2,200 points.