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Virginia Gov. Youngkin sees recession fears ease with GOP victories

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Glenn Youngkin speaking at CNBC’s Delivering Alpha, Sept. 28, 2022.

Scott Mlyn | CNBC

Virginia Gov. Glenn Youngkin predicts that Republican gains within the 2022 midterms could help curb recession fears.

“I feel that will likely be a chilled influence. Now as an alternative of getting single-party government, we have now divided government and we could find yourself with, I feel, slightly more rational spending,” Youngkin told CNBC’s Ylan Mui on the Delivering Alpha conference in Latest York City on Wednesday. “I’m expecting that if that may occur we’ll see, yes, a slowdown, but we cannot see a tough landing.”

Youngkin, a Republican, said Americans generally think his party will take back the House and that he’s “cautiously optimistic” it is going to also retake the Senate. A former private equity executive, Youngkin’s victory in Virginia last 12 months was his first elected office. He ran for governor after 25 years with The Carlyle Group, certainly one of the world’s most influential private equity firms, retiring as co-CEO.

“I feel there is a moment here where, yes, demand is feeling an actual pressure from the rise in rates of interest, but I do think we are able to manage through this with an election end result that I feel restores balance, but on top of that, corporations maintaining confidence, moving forward with their long-term investment plans and maintaining their hiring plans.”

Youngkin has declared Virginia “open for business” and has sought to draw corporations to the state. Virginia is ranked third in CNBC’s America’s Top States for Business in 2022 after holding the highest spot for the previous two consecutive years.

Youngkin predicted that Republican gains in November’s midterm elections could boost the economy in the identical way that, he says, former President Donald Trump’s 2016 win did six years ago.

He said there’s broad fear now that the economy is heading toward a recession, which he said is brought on by a decline in consumer confidence.

“When you remember, return to 2016 where it was clear that we were going to move right into a recession and it was also broadly thought that Hillary Clinton was going to win,” Youngkin said “What happened, in fact, was there was a switch, a change. When Donald Trump won the entire sudden optimism went back into the market and we avoided a recession.”

The University of Michigan Consumer Sentiment Index rose 8.2 points above the November preelection reading after Trump’s election in 2016, pushing the index 6.6 points higher for the whole month.

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