Trump's economy is like a bending twig -- and it won't take much more to make it snap: stock market analyst
August 27, 2019
Lori Calvasina, who works as RBC Capital Markets' head of U.S. equity strategy, tells Bloomberg that the strain of President Donald Trump's trade war and his erratic behavior are combining to put significant strain on the American economy -- and she says a breaking point will arrive soon if things don't change.
In an interview with Bloomberg, Calvasina says the economy at the moment is a lot like a twig that's being slowly bent backward.
"The trade war, all the political uncertainty -- it’s like you’ve got a twig and you’re bending it and it’s just bending, bending, bending," she said. "We all know what happens if we bend the stick too long. Eventually it just snaps and it just goes."
In a recent research note, Calvasina also argued that it does not appear any resolution to the Trump trade war is coming in the near future, meaning companies could start to pull back on investing, which would have a cascading effect on the rest of the economy.
"There’s a negative feedback loop that’s starting to develop," she said. "You can absolutely see hints of it."
Trump has insisted that the economy is in strong shape, but has also called for stimulative policies ranging from aggressive interest rate cuts and further tax cuts.