Is Trump deliberately creating an American recession? Is it highly likely that the Federal Reserve will start cutting interest rates in June this year? Since Trump took office, American assets have started to plummet Looking at the trend of the US dollar, and then looking at the trend of the US stock market, Tesla's stock price has fallen by more than 40% from the beginning of the year to now Behind the sharp decline in the US stock market, is the US economy really going to decline? First of all, after he came to power, he clearly knew that the United States was facing high inflation and deliberately increased tariffs to make Americans spend more money on shopping. In fact, it set up the Government Efficiency Department, which made Musk engage in government layoffs and further increased the number of unemployed people in the United States At first glance, isn't this intentionally dragging down the US economy? Trump is really that stupid? On the contrary, Trump's behavior may seem absurd, but in reality he is the most sober minded. The core reason for all these measures is only a lack of money, the massive $36 trillion US debt alone requires an annual interest payment of $1.2 trillion, which is higher than the entire defense budget. So to put it simply, the US government is now poor and the debt cancellation is the top priority after Trump came to power. Originally, Trump wanted the Federal Reserve to cooperate with him to cut interest rates. However, the Federal Reserve's position is different from his. He doesn't care how much money your government owes. He is looking at inflation and the economy. Inflation has not dropped to 2%, and the economy has not yet declined. I can't cut interest rates and directly shake his face. Trump was also worried. First, he said he would replace the chairman of the Federal Reserve and let Powell step down. Later, he asked Musk to bombard the Federal Reserve for three days. Later, he forwarded the post on the dissolution of the Federal Reserve, and then went to check the accounts of the Federal Reserve The Federal Reserve is still holding its tongue. Trump simply released two big moves to let the market force you to cut interest rates The first move is to cut 1 trillion yuan in government spending. In the fiscal year 2024, the US government, along with state and local governments, will spend up to $1.4 billion, which may reach around 35% to 40% of GDP. Similarly, in recent years, the GDP growth in the United States has mostly relied not on industry or trade, but on the government's crazy borrowing and spending to stimulate it. If Trump cuts government spending by 1 trillion yuan this year, the economic growth will shrink. Will the Federal Reserve cut interest rates at that time? The second is the tariff stick. In the past, the United States only worked with one country, which is easy to say. Now Trump is planning to raise taxes on Canada, the European Union and Mexico with the whole world, but the tariff increase is not one-way. After you add it, others will return it to you, which will only lead to soaring prices in the United States, shrinking people's wallets, declining profits of local enterprises, and a wave of layoffs. The question is, will the Federal Reserve cut interest rates? Looking at historical data, during the 2008 financial crisis, the Federal Reserve cut interest rates 10 times in a row, by 500 basis points, from 5.25% to near zero interest rates. During the COVID-19 in 2020, the Federal Reserve also resorted to the old practice of reducing by 150 basis points to save the economy. In combination with these situations, the institutions have reached a consensus that if the economy continues to deteriorate, the Federal Reserve will probably start to cut interest rates in June this year. So Trump is deliberately creating a recession, because he foresaw that the recession in the United States is actually inevitable. It is better to take advantage of this opportunity and take the initiative to reduce leverage. Government layoffs are aimed at cutting expenses and achieving a fiscal surplus for the United States, while tariff increases are aimed at promoting the sustained return of American manufacturing. As for the US stock market, it always sacrifices one at a critical moment There was a rate cut from September to December 2024, and BTC also rose for several months, So it is estimated that the next wave of market trend will probably not start until the end of May This article is sponsored by Bitget | @ Bitgetzh