Trump’s Former Economic Chief Gary Cohn Predicts No Recession

Robert Schmidt

(Bloomberg) -- Former White House economic director Gary Cohn said he sees no recession on the horizon and predicted that the economy will continue to grow as the U.S. heads into this year’s presidential election.

The ex-Goldman Sachs Group Inc. president, appearing on CBS’s “Face the Nation,” also praised the Federal Reserve, saying it has U.S. interest rates “in a good place.” That opinion isn’t shared by his old boss, President Donald Trump, who has relentlessly criticized the central bank for not cutting rates more aggressively.

“We actually have interest rates at a level right now where activity is growing,” Cohn said on Sunday.

Cohn was Trump’s first National Economic Council chief, serving from January 2017 to April 2018. He spearheaded the massive 2017 tax overhaul but resigned after losing an internal fight over Trump’s decision to impose tariffs on steel and aluminum imports.

A fierce backer of free trade, Cohn dismissed Trump’s strategy of imposing tariffs to give him an upper hand on trade deals as ineffective and harmful to the economy.

“I think it’s totally hurt the United States,” said Cohn. “The U.S. economy is very strong, very solid. Employment growth is great. But we’re missing a big component. We’re missing the capital expenditures from companies in the United States.”

‘Social Issues’

A Democrat who spent more than 25 years at Goldman Sachs, Cohn refused to say if he would back any of the current Democratic contenders for president. He was even reluctant to discuss whether he’d vote for Trump, saying that while he supported the president’s work on the economy and on reducing federal regulations, he would also take some “social issues” into consideration.

“I’m leaving the door open,” Cohn said. “But at this point, I don’t have any intention not to vote for the president.”

Cohn was critical of the general anti-business tone in the Democratic race, saying that the candidates don’t seem to have any ideas for making the economy better.

“It’s probably easier to talk about corporate greed, and talk about Wall Street, and talk about technology companies because they don’t really have an answer for an economy that’s growing,” he said. “I haven’t heard their answer on that, except let’s tax it to death.”

On interest rates, Cohn said he’s “not worried” about the Fed’s recent decisions. Central bank officials cut rates three times in 2019 but signaled they expect to keep them on hold through 2020, based on their forecast of moderate economic growth with unemployment staying near a 50-year low.

To contact the reporter on this story: Robert Schmidt in Washington at rschmidt5@bloomberg.net

To contact the editors responsible for this story: Jesse Westbrook at jwestbrook1@bloomberg.net, Steve Geimann, Ros Krasny

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