Phyrex
Phyrex|Jul 09, 2025 06:54
Trump really hates not Musk, but Powell. In his world view, in January and February 2025, he had already taken the initiative to make friends and softened his attitude, but Powell would not let up and cut interest rates, which made Trump very uncomfortable. Because everything he wants to do must be based on the premise of low interest rates. Firstly, the stock market. Trump repeatedly said that his appointment would bring a bull market. But the reality is that the stock market has become more volatile, especially after the implementation of tariffs, which has caused severe market volatility and shaken confidence. And this uncertainty is directly reflected in the polls, which is a drag on his and the Republican Party's election prospects. For the 2026 midterm elections and the 2028 elections, both are unfavorable factors. To stabilize the stock market, the first step is to cut interest rates and alleviate the constraint of high interest rates on liquidity. Secondly, in terms of finance, Trump's beautiful bill has raised the debt ceiling, but also increased financial expenditure. The Ministry of Finance can not even afford the interest rate of 4.5% while issuing bonds, by doing manufacturing industry reflow, infrastructure construction and industrial subsidies. Cutting interest rates is a prerequisite for this logic to continue operating. Without cutting interest rates, not only will the plan fail, but the debt will also continue to grow. Next, as for the exchange rate, Trump is fighting a global tariff war. Japan, South Korea, China and Mexico take turns to take part in the war. Exporters are already under great pressure. If the US dollar remains strong again, it will double down the domestic manufacturing industry. Therefore, for Trump, the depreciation of the US dollar is very necessary, but it cannot be alleviated by interest rate reduction because of recession, and the reduction of DXY can also release more liquidity, stimulate the risk market and improve the risk appetite of investors. Then politically, Trump needs an obedient Federal Reserve, not a maverick Federal Reserve, and Trump needs Powell to be obedient. Because only the cooperation of the Federal Reserve can make Trump better re tariff, as well as other political platforms, but for inflation, I believe Trump will realize that there may be a problem, but it must not be his main concern now. He has only been in office for half a year, and almost every month there are incidents that arise because of him. Last but not least, even we know that in the history of the United States, when the interest rate is high, there is a 70% to 80% probability of economic recession. How could Trump not know that it is urgent for Trump to cut interest rates as soon as possible to eliminate the probability of economic recession caused by high interest rates. If there is a real economic recession in Trump's term, Trump's support rate will be lower, which will also be the direction for the Democratic Party to attack.
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