For Trump, the economy is a potential 2020 storm cloud

WASHINGTON (AP) — Forget Robert Mueller.

The greatest threat to President Donald Trump's re-election bid may not be the slew of investigations closing in on his Oval Office but a possible economic slowdown. And the president knows it.

The Dow Jones Industrial Average fell again Monday, the latest dip in the roller coaster markets amid the strain of Trump's trade war, rising interest rates and worries about a slowing global economy.

Trump, who has tied his political fortunes to the stock market in an unprecedented fashion, has nervously watched Wall Street, keeping an eye on the cable television ticker and barking at his aides for updates. And while he continues to talk up America's financial might, he has repeatedly and publicly rebuked the chairman of the Federal Reserve for interest rate increases he feels could slow the economy.

Trump made his feelings clear again Tuesday, a day before the Fed is expected to raise its key interest rate for the fourth time this year.

"I hope the people over at the Fed will read today's Wall Street Journal Editorial before they make yet another mistake. Also, don't let the market become any more illiquid than it already is. Stop with the 50 B's. Feel the market, don't just go by meaningless numbers. Good luck!"

He said Monday on Twitter that "It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike. Take the Victory!"

Throughout Trump's term, the economy has been strong. And while the president credits his aggressive tax-cut package and deregulation efforts, the gains in fact began under President Barack Obama.

Optimism about the economy has cooled somewhat this fall as Trump's trade fight with China rattled the markets.

Fond of citing job statistics and market reports, Trump has appeared highly attuned to the shift. After unnerving much of the global financial system by imposing tariffs, Trump seemed eager to ease anxiety recently, striking a trade truce with China after a dinner meeting during an international summit in Argentina. And when that move only briefly buoyed confidence, Trump set off on an erratic bout of tweeting that rocked the markets even more.

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US President Donald Trump drives a golf buggy on his golf course at the Trump Turnberry resort in South Ayrshire, where he and his wife Melania, spent the weekend as part of their visit to the UK before leaving for Finland where he will meet Russian leader Vladimir Putin for talks on Monday. (Photo by Andrew Milligan/PA Images via Getty Images)
US President Donald Trump on his golf course at the Trump Turnberry resort in South Ayrshire, where he and his wife Melania, spent the weekend as part of their visit to the UK before leaving for Finland where he will meet Russian leader Vladimir Putin for talks on Monday. (Photo by Andrew Milligan/PA Images via Getty Images)
US President Donald Trump drives a golf buggy on his golf course at the Trump Turnberry resort in South Ayrshire, where he and his wife Melania, spent the weekend as part of their visit to the UK before leaving for Finland where he will meet Russian leader Vladimir Putin for talks on Monday. (Photo by Andrew Milligan/PA Images via Getty Images)
US President Donald Trump drives a golf buggy on his golf course at the Trump Turnberry resort in South Ayrshire, where he and his wife Melania, spent the weekend as part of their visit to the UK before leaving for Finland where he will meet Russian leader Vladimir Putin for talks on Monday. (Photo by Andrew Milligan/PA Images via Getty Images)
TURNBERRY, SCOTLAND - JULY 15: U.S. President Donald Trump hits a tee shot whilst playing a round of golf at Trump Turnberry Luxury Collection Resortduring the U.S. President's first official visit to the United Kingdom on July 15, 2018 in Turnberry, Scotland. The President of the United States and First Lady, Melania Trump on their first official visit to the UK after yesterday's meetings with the Prime Minister and the Queen is in Scotland for private weekend stay at his Turnberry. (Photo by Leon Neal/Getty Images)
TURNBERRY, SCOTLAND - JULY 15: U.S. President Donald Trump waves whilst playing a round of golf at Trump Turnberry Luxury Collection Resort during the U.S. President's first official visit to the United Kingdom on July 15, 2018 in Turnberry, Scotland. The President of the United States and First Lady, Melania Trump on their first official visit to the UK after yesterday's meetings with the Prime Minister and the Queen is in Scotland for private weekend stay at his Turnberry. (Photo by Leon Neal/Getty Images)
US President Donald Trump plays a round of golf on the Trump Turnberry resort in South Ayrshire, where he and first lady Melania Trump are spending the weekend. (Photo by Jane Barlow/PA Images via Getty Images)
U.S. President Donald Trump swings a golf club as young participants look on during the White House Sports and Fitness Day event on the South Lawn of the White House in Washington, U.S., May 30, 2018. REUTERS/Jonathan Ernst TPX IMAGES OF THE DAY
An aerial view shows U.S. President Donald Trump (top R) plays golf with Japan's Prime Minister Shinzo Abe (top L) and Japanese golfer Hideki Matsuyama (top 2nd R) at the Kasumigaseki Country Club in Kawagoe, north of Tokyo, Japan, in this photo taken by Kyodo November 5, 2017. Mandatory credit Kyodo via REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. MANDATORY CREDIT. JAPAN OUT. NO COMMERCIAL OR EDITORIAL SALES IN JAPAN.
U.S. property magnate Donald Trump practices his swing at the 13th tee of his new Trump International Golf Links course on the Menie Estate near Aberdeen, Scotland, Britain June 20, 2011. To match Special Report USA-ELECTION/TRUMP-GOLF REUTERS/David Moir/File Photo
Republican presidential candidate Donald Trump drives a golf cart with his granddaughter Kai Trump on the golf course at his Trump International Golf Links in Aberdeen, Scotland, June 25, 2016. REUTERS/Carlo Allegri
U.S. property mogul Donald Trump leads a media event on the sand dunes of the Menie estate, the site for Trump's proposed golf resort, near Aberdeen, Scotland, Britain May 27, 2010. To match Special Report USA-ELECTION/TRUMP-GOLF REUTERS/David Moir/File Photo
Republican presidential candidate Donald Trump drives a golf cart with his granddaughter Kai Trump on the golf course at his Trump International Golf Links in Aberdeen, Scotland, June 25, 2016. REUTERS/Carlo Allegri
Golf - RICOH Women's British Open 2015 - Trump Turnberry Resort, Scotland - 30/7/15 US Presidential Candidate Donald Trump views the course during a visit to his Scottish golf course Turnberry Action Images via Reuters / Russell Cheyne Livepic
Real Estate magnate Donald Trump gestures as he plays golf during the opening of his Trump International Golf Links golf course near Aberdeen, northeast Scotland July 10, 2012. REUTERS/David Moir (BRITAIN - Tags: BUSINESS SPORT GOLF REAL ESTATE)
Real Estate magnate Donald Trump (R ) plays golf during the opening of his Trump International Golf Links golf course near Aberdeen, northeast Scotland July 10, 2012. REUTERS/David Moir (BRITAIN - Tags: BUSINESS SPORT GOLF REAL ESTATE)
PGA Chief Executive Sandy Jones (R) puts his arm around real estate magnate Donald Trump as they play golf during the opening of the Trump International Golf Links golf course near Aberdeen, northeast Scotland July 10, 2012. REUTERS/David Moir (BRITAIN - Tags: BUSINESS SPORT GOLF REAL ESTATE TPX IMAGES OF THE DAY)
Real estate magnate Donald Trump (R) plays golf during the opening of his Trump International Golf Links golf course near Aberdeen, northeast Scotland July 10, 2012. REUTERS/David Moir (BRITAIN - Tags: BUSINESS SPORT GOLF REAL ESTATE)
U.S. property magnate Donald Trump gestures during a tour of his new Trump International Golf Links course on the Menie Estate near Aberdeen, north east Scotland June 20, 2011. Trump was in Scotland to give a media tour of the luxury golf course a year into its construction. REUTERS/David Moir (BRITAIN - Tags: BUSINESS SPORT GOLF SOCIETY)
Donald Trump (R) drives his golf cart along the ninth fairway while he watches the final group of the day with an unidentified partner during the first round of the ADT Championship LPGA golf tournament at the Trump International course in West Palm Beach, Florida November 15, 2007. REUTERS/Hans Deryk (UNITED STATES)
Donald Trump tosses a golf ball to his caddy after hitting a shot into the rough in a skins match at the Manhattan Golf Classic on Governors' Island in New York October 22, 2006. REUTERS/Jeff Zelevansky (UNITED STATES)
ABERDEEN, SCOTLAND - JULY 10: Donald Trump is accompanied by the media during the opening of The Trump International Golf Links Course on July 10, 2012 in Balmedie, Scotland. The controversial �100m course opens to the public on Sunday July 15. Further plans to build hotels and homes on the site have been put on hold until a decision has been made on the building of an offshore windfarm nearby. (Photo by Ian MacNicol/Getty Images)
ABERDEEN, SCOTLAND - JULY 10: Donald Trump plays a round of golf after the opening of The Trump International Golf Links Course on July 10, 2012 in Balmedie, Scotland. The controversial �100m course opens to the public on Sunday July 15. Further plans to build hotels and homes on the site have been put on hold until a decision has been made on the building of an offshore windfarm nearby. (Photo by Ian MacNicol/Getty Images)
Donald Trump views developments to his luxury golf resort during a visit to the Menie estate in Aberdeenshire. (Photo by Danny Lawson/PA Images via Getty Images)
Donald Trump swings a golf club on the Menie Estate, where his controversial luxury golf resort will be built. The coastal resort in Balmedie, Aberdeenshire, will have two golf courses, a 450-bedroom hotel, 950 holiday apartments and 500 residential homes. (Photo by Andrew Milligan/PA Images via Getty Images)
28 Aug 2008: Donald Trump and Sergio Garcia during the Deutsche Bank Championship Pro-Am event at the TPC Boston in Norton, MA. (Photo by Richard Cashin /Icon SMI/Icon Sport Media via Getty Images)
13 Jul. 2006: Businessman Donald Trump misses a putt to the right during the 2006 American Century Celebrity Golf Tournament played at the Edgewood Tahoe golf course in Stateline, NV. (Photo By John Cordes/Icon Sportswire via Getty Images)
13 Jul. 2006: Businessman Donald Trump heads for the next hole during the 2006 American Century Celebrity Golf Tournament played at the Edgewood Tahoe golf course in Stateline, NV. (Photo By John Cordes/Icon Sportswire via Getty Images)
UNITED STATES - FEBRUARY 11: Donald Trump climbs back up to the green after chipping during the third round of the AT&T Pebble Beach National Pro-Am on Pebble Beach Golf Links in Pebble Beach, California on February 11, 2006. (Photo by Chris Condon/PGA)
Donald Trump during the third round of the AT&T Pebble Beach National Pro-Am on Pebble Beach Golf Links in Pebble Beach, California on February 11, 2006. (Photo by Chris Condon/PGA)
PEBBLE BEACH, CA - FEBRUARY 9: Donald Trump hits a shot during the first round of the AT&T Pro Am on February 9, 2006 at the Poppy Hills Golf Course in Pebble Beach, California. (Photo by Stephen Dunn/Getty Images)
View of American football player Tom Brady (seated left) and real estate developer Donald Trump in a golf cart at Trump International Golf Club, Palm Beach, Florida, January 22, 2006. (Photo by Davidoff Studios/Getty Images)
UNITED STATES - FEBRUARY 10: Donald Trump during the first round of the 2005 AT&T Pebble Beach National Pro-Am at Spyglass Hill Golf Club in Pebble Beach, California on February 10, 2005. (Photo by Mike Ehrmann/Getty Images)
PEBBLE BEACH, CA - FEBRUARY 12: Businessman Donald Trump looks on while waiting on the second fairway of the Pebble Beach Golf Links during the third round of the AT&T Pebble Beach Pro-Am National Tournament on February 12, 2005 in Pebble Beach, California. (Photo by Justin Sullivan/Getty Images)
UNITED STATES - FEBRUARY 10: Donald Trump during the first round of the 2005 AT&T Pebble Beach National Pro-Am at Spyglass Hill Golf Club in Pebble Beach, California on February 10, 2005. (Photo by Mike Ehrmann/Getty Images)
Mel Melcon Developer Donald Trump poses next to a green side bunker on hole 11 at his new golf course, Trump National Golf Club in Rancho Palos Verdes, on Friday morning. Digital image taken on 01/14/05 (Photo by Mel Melcon/ Los Angeles Times via Getty Images)
UNITED STATES - JUNE 09: Donald Trump putts on the ninth hole in the pro-amateur Buick Classic at the Westchester Country Club in Harrison, N.Y. (Photo by Howard Earl Simmons/NY Daily News Archive via Getty Images)
PLEASANTVILLE, NY - JULY 27: Donald Trump attends Trump National Golf Club Grand Opening on July 27, 2002 at Briarcliff Manor in Pleasantville, New Jersey. (Photo by Ron Galella/WireImage)
PLEASANTVILLE, NY - JULY 27: Ron Howard and Donald Trump attend Trump National Golf Opening on July 27, 2002 at Briarcliff Manor in Pleasantville, New York. (Photo by Ron Galella/WireImage)
31 Jan 2002: Donald Trump hits his second shot on the par 4 8th hole during the first round of the AT&T Pebble Beach National Pro-Am at Spyglass Golf Course in Pebble Beach, California. Digital Image. Mandatory Credit: Craig Jones/Getty Images
Married American couple, real estate developer Donald Trump and actress Marla Maples, with their daughter Tiffany, pose in a club Car golf cart on the Mar-a-Lago estate, Palm Beach, Florida, late 1990s. (Photo by Davidoff Studios/Getty Images)
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First Trump declared himself a "Tariff Man," promising to inflict as much economic pain as possible — a move that horrified investors. A day later he sought to minimize the anxieties, saying there were "very strong signals" that China was negotiating in good faith.

"Not to sound naive or anything, but I believe President Xi meant every word of what he said at our long and hopefully historic meeting," Trump tweeted.

Stocks fell again Monday as both the Dow and the S&P 500 are on pace for their worst December performance since 1931, when they were battered during the Great Depression. As investors turned to an upcoming meeting of the Federal Reserve, its chairman, Jerome Powell, has repeatedly been the target of Trump's wrath, as the Fed has been raising interest rates to make sure that the lowest unemployment in nearly five decades does not start pushing inflation higher. Arguing that the rate hikes hamper economic growth, Trump has openly questioned Powell's leadership.

"I think the Fed is making a mistake. They are so tight. I think the Fed has gone crazy," the president said in October.

No longer tweeting much about the stock market, Trump has criticized Powell privately as well and has told confidants that he understands that a recession would be perilous for a president who once mused about the Dow hitting 30,000. (Its record was 26,828 in October.) Although Trump is not seriously considering making a change at the Fed, he has repeatedly insisted that his businessman background allows him to understand the economy more than Powell, according to four White House aides and outside advisers who were not authorized to discuss private conversations and who spoke on condition of anonymity.

"He thinks his legacy is going to be the guy who rebuilt and revived the U.S. economy. He's totally focused on that," said Stephen Moore, a former Trump campaign adviser and visiting fellow at the Heritage Foundation. "He understands that if the economy remains strong, he'll be re-elected. He's completely focused on the economy. He does follow the stock market, he does follow the stock reports, he does follow the jobs report."

Democrats considering challenging Trump in 2020 have begun putting forward their own economic plans. But a senior White House official said Trump remains confident in the economy, citing low unemployment numbers, GDP growth and growth in manufacturing jobs, among other indicators.

The official, who wasn't authorized to speak publicly, said Trump is watching the indicators closely and is regularly briefed by Larry Kudlow, director of the National Economic Council; Treasury Secretary Steven Mnuchin; and Kevin Hassett, chairman of the Council of Economic Advisers.

"The American economy is booming," Kudlow told The Associated Press. "While economies around the world are struggling, our economic fundamentals are incredibly strong."

Trump is right to worry about how an economic slowdown could affect his presidency. Bill Clinton aide James Carville's famous mantra during the 1992 presidential campaign was: "It's the economy, stupid." And the nation's financial health is often key to a president's re-election chances.

The last two presidents who failed to be re-elected, Jimmy Carter and George H.W. Bush, were primarily done in by faltering economies, said presidential historian Douglas Brinkley.

"It's hard to convince the public to give you another chance if the economy is not doing well," said Brinkley, a professor at Rice University. He suggested that even voters who do not like Trump's personal behavior "tolerate him because they think he is good for Wall Street and jobs. If there is an economic downturn, that is going to take a devastating effect on him."

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Follow Lemire on Twitter at http://twitter.com/@JonLemire and Lucey at http://twitter.com/@catherine_lucey

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