Peter Navarro wants more interest rate cuts as Fed official bullish on U.S. economy

The United States-China trade war is hampering growth, sending the global economy into a frigid winter. The level of uncertainty is impacting manufacturing and service sectors, and without a trade agreement in sight, markets expect greater declines.

Is it so bad that a recession will happen?

Surprisingly, the answer is no.

Despite the various signals, the U.S. economy will probably not enter into a recession. With the Federal Reserve already cutting interest rates, giving the economy a boost, markets are getting their artificial boost. This will prolong the expansion, but exacerbate the agony when it strikes.

Atlanta Federal Reserve Bank President Raphael Bostic does not believe the U.S. is headed for a steep downturn, adding that the latest stimulus will help the country navigate through the bumps in the road.

While he is optimistic about the world’s largest economy, he says that the central bank is “wrestling with” whether the U.S. should prepare for a “soft landing” or a “steep decline.”

Either way, chief White House trade adviser Peter Navarro believes the Fed should keep lowering interest rates, despite the resilient September jobs report (SEE: Random Friday: September jobs report, Newseum’s closure, #EatTheBabies).

“This number, even though it’s a very good number, should not deter the Federal Reserve from aggressively lowering its rates for one simple reason – not because the economy is slowing down – but because our dollar is so overvalued, it’s killing our exports,” he said in an interview with CNN.

With rates nearing zero again and the vast money-printing, the Fed will keep the charade going. But for how much longer?