November 15, 2018 / 6:02 AM / in 6 months

RPT-REUTERS SUMMIT-Message to Trump: Focus on the economy already

 (Repeats with no changes to headline or text)
    By Jonathan Stempel
    NEW YORK, Nov 15 (Reuters) - A week after his Republican
Party lost majority control in the U.S. House of Representatives
to Democrats, President Donald Trump is getting advice from
economists and investors to sharpen his focus on a possible
winning issue for him as the 2020 White House campaign gets
under way: the economy.
    "If I were his campaign manager, I would stress how well the
economy is doing," said Byron Wien, vice chairman at Blackstone
Private Wealth Solutions Group in New York, and one of several
speakers at the Reuters Global Investment 2019 Outlook Summit to
offer the president advice.
    "He'd rather talk about emotionally charged issues, like
immigration," Wien said. "But in fact the pace of the economy,
the level of unemployment, the slow increase in inflation are
achievements that he should be happy about. They occurred on his
    Trump has reason to celebrate an economy that has benefited
from tax cuts and stimulus enacted in his first year in the
White House, despite expectations they will cause the federal
budget deficit to rise.
    Unemployment sits at a 49-year low of 3.7 percent, while
consumer confidence has reached an 18-year high and wage growth
a more than nine-year high.             
    Gross domestic product, meanwhile, grew at a 3.5 percent
annualized pace in the third quarter, the Department of Commerce
estimated, above what economists call its longer-term annualized
growth potential of 2 percent.             
    Trump, nevertheless, has focused much of his recent public
policy attention on immigration and on trade with China, where
the administration has imposed new tariffs and threatened more
as it pursues concessions on intellectual property, technology
and access to local markets.                          
    "President Trump is notorious for surprises," said Scott
Minerd, global chief investment officer of Guggenheim Partners
in New York, which invests $265 billion.
    "The administration recognizes that in the short run it has
the upper hand," he continued. "Having said that, I'm not so
sure that in the long run that should be our policy solution."
    Trump has also questioned whether the Federal Reserve might
choke off the nine-year economic expansion by raising interest
rates too fast, telling Reuters in August he was "not thrilled"
with the chairman he appointed, Jerome Powell.             
    Summit guests said the Fed will want to raise its benchmark
interest rate, now 2 percent to 2.25 percent, another 0.25
percentage points in December, with more increases in 2019.
    With the economy enjoying a "sugar high," any "Fed-bashing
by Trump could backfire. It's almost counterproductive," said
Joachim Fels, group economic adviser at Pacific Investment
Management Co in Newport Beach, California, which invests $1.72
    "The Fed may want to pause and will want to pause at some
stage next year," Fels said. "They don't want to be seen as
taking orders from the White House."
    Richard Bernstein, who runs Richard Bernstein Advisors LLC
in New York and was once Merrill Lynch & Co's chief investment
strategist, said Trump often gets distracted on other issues,
such as imposing sanctions against Iran, with no follow-through.
    "Talk about shooting yourself in the economic foot," said
Bernstein, who oversees $9.5 billion. "You had people talking
for months about the Iran sanctions, and then ... they granted
waivers to everybody who asked for a waiver. So what was the
point of getting everyone nervous for six months?
    "If I were president," Bernstein said, "I would be crowing
about the economy and I wouldn't be talking about anything else.
But I'm not the president."
    Like many others, Wien, a former Morgan Stanley chief U.S.
investment strategist, suggested that Trump curtail use of one
of his own favorite mediums to communicate: Twitter.
    "I would tell him to close his Twitter account," said Wien,
who is 85. "He trusts his instincts, and just as all of my
essays get edited by somebody, all of his instincts should be
edited by somebody."

 (Reporting by Jonathan Stempel in New York; editing by Jennifer
Ablan and Tom Brown)
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