“Consumers are hanging in there," says Nobel-prize winning economist Robert Shiller, who believes a recession may be years away due to a bullish Trump effect in the market.
Speaking on CNBC’s "Trading Nation" on Friday, the Yale professor said Trump is creating an environment that’s conducive to strong consumer spending, and it’s a major force that should hold off a recession.
“Consumers are hanging in there. You might wonder why that would be at this time so late into the cycle. This is the longest expansion ever."
"Now, you can say the expansion was partly [President Barack] Obama... But lingering on this long needs an explanation.”
Specifically, Shiller told CNBC that he believes that Americans are still opening their wallets wide based on what President Trump exemplifies: Consumption.
“I think that [strong spending] has to do with the inspiration for many people provided by our motivational speaker president who models luxurious living."
Finally, Shiller concludes that the next recession may not hit for another three years, and it could be mild.
“Let’s not make the mistake of assuming it’s right around the corner,” Shiller said.
“If the economy is strong, which is what he built is case on, ‘make America great again,’ he has a good chance of getting re-elected.”
But, before the markets can take-off, Shiller stresses President Trump needs to get past the impeachment inquiry.
“If he survives that, he might contribute for some time in boosting the market,” said Shiller.
“We’re maybe in the Trump era, and I think that Donald Trump by inspiration had an effect on the market - not just tax cutting.”
He sees this as the biggest threat to his optimistic forecast.