Nobel Prize-winning economist Robert Shiller estimates that a recession could be years away due to a bullish Trump effect on the market.
According to the professor at Yale University, President Donald Trump creates an environment conducive to strong consumer spending, and it's a great force to stem a recession.
"Consumers are in there, you may be wondering why this would be so late in the cycle at this point in time." This is the longest expansion that has ever existed. Now you can assume the expansion was partial [President Barack] Obama, "he told CNBC's" Trading Nation "on Friday. "But to stay that long needs an explanation."
Shiller, a behavioral finance analyst who does not publish the new book "Narrative Economics", believes that Americans are still widely opening their wallets, based on the example of President Trump: Consumption] "I think that [strong spending] has to do with the inspiration for many people that our president provides as a motivational speaker modeling luxurious living, "said Shiller.
Shiller emphasizes that Wall Street is still surrounded by uncertainty and risk.
Before Shiller stresses that President Trump must leave the impeachment investigation behind for the markets to get going. He sees this as the biggest threat to his optimistic prognosis.
"The Trump era"
"If he survives that, he may, for some time, help revive the market," Shiller said. "We may be in the Trump era, and I think Donald Trump inspired the market with his inspiration, not just tax cuts."
Despite Shiller's optimistic attitude, he warns that not everything is rosy in the economy. His Shiller PE Ratio, also known as CAPE, tracks value for money based on inflation-adjusted average earnings over the last 1
"I'm not saying that I'm so bullish because I have a bearish CAPE ratio," said Shiller, who predicted at "Trading Nation" in March last year that there was a 50 percent chance that the economy slips into recession within 18 months.
Nonetheless, he sticks to the idea that the economy and the markets should have plenty of time to profit if President Trump stays in office for pro spending, pro-business narratives.
Shiller claims the next recession could continue for another three years, and it could be mild.
"Do not make the mistake of assuming she's just around the corner," Shiller said. "If the economy is strong, as he has built on, he has a good chance of being re-elected."