Is Trump the maker of the US recession, or the accelerator of the US economy? Where is the turning point for the US stock market and cryptocurrency under the carrot and stick? I was talking about Trump with my friends at dinner last night. When I got home, I saw @ shufen46250836 had a similar view, which was like it was necessary to have a good talk. This view may be helpful for our friends to judge whether the bull market will rebound next or enter the bear market. Viewpoint: Trump is not blind to the decline of the stock market, or unaware of the possible impact of increased tariffs on the risk market, or unaware of the possible impact of tariffs on U.S. inflation. It is clear that Trump knows that it is not good but still needs to do so because it needs the United States to quickly enter the stage of economic recession, because only when the economy is in recession, can it quickly reduce U.S. inflation, and then force the Federal Reserve to enter the mitigation of significant interest rate cuts. The main purpose is because the current fiscal deficit in the United States is too large, especially the interest paid on US bonds. According to Deutsche Bank's analysis, by 2025, while maintaining a 4.5% interest rate, the total interest that the United States needs to pay on US bonds will be $1.3 trillion, which is still interest. If we follow the Federal Reserve's expectation of cutting interest rates twice in 2025, both in the third and fourth quarters, it will not actually help the US fiscal deficit much. However, if the US economy declines and inflation drops significantly, and the Fed raises interest rates to four times (1%) in 2025, the interest paid by the US can be reduced by $75 billion, and in the long run, it can reduce interest by around $360 billion. So if the Federal Reserve can cut interest rates 8 times (2%) in 2025, it will reduce the burden of fiscal pressure by nearly half. So the main idea of the partners in this view is that Trump should first break the current situation and then rebuild. The less paid interest can be used to make more guiding investment, or to promote the growth of the U.S. economy, rather than to pay more interest and increase the burden on the government. debate: But is this view true? Maybe no one knows except Trump and a few cabinet members. If we assume that Trump is going to do this, what is missing from Trump? It is an open attack on the current interest rate, the Federal Reserve and Powell. If Trump needs to be indestructible, he should go to Powell every other time to shout that the Federal Reserve needs to cut interest rates as soon as possible, and Trump needs to provide an endless stream of bullets for interest rate cuts. For example, the customs duties will continue to be increased, instead of being increased twice for one day, and for DOGE, they should also be allowed to cut staff significantly, rather than letting DOGE hand over its rights. But now what Trump has done is completely the opposite. After the Federal Reserve did not change the interest rate in January, Trump praised the Federal Reserve and encouraged the Federal Reserve not to cut interest rates. In March, the Secretary of Commerce announced that Trump is not urging the Federal Reserve to cut interest rates, and more importantly, even though these are all personal performances of Trump, his staff will arrange his brother to shout across the air, but now we do not see a strong and tough Federal Reserve in the House of Representatives. On another level, for example, this is Trump's last term in office. Whether Trump is willing to submit a tenure cycle of economic recession to draw an end to himself or not, I think Trump is not so selfless. He has a strong performing personality, and he hopes to achieve the slogan of "America First" under his own leadership. In the last term, Trump often said that he was the only president who did not have war during his tenure, and it was not a good option for Trump to cause economic recession. So what is the purpose of the Trumpca tariff? 1. Implement the campaign manifesto's goal of bringing manufacturing back to the United States and creating better job opportunities, and the new US Canada Mexico agreement has this effect by increasing tariffs on Mexico and Canada to force both countries to compromise and establish more manufacturing environments in the United States, such as automobiles. 2. The tax increase on Europe is more to balance the war between Ukraine and Russia. Trump has long wanted to stop the Russian Ukrainian war, so the pressure is on Ukraine. But because Europe has been supporting Ukraine, Trump hopes to force Europe to stop its aid to Ukraine by increasing tariffs on Europe. Why is Ukraine so important? Because it is related to sanctions against China. After restricting Chinese semiconductors, China imposed counter sanctions on the United States' rare earth minerals. Ukraine's unmined rare earth minerals happen to be needed by the United States to replace China, and Ukraine is relatively better controlled than China. We won't talk about China anymore. After all, it stems from political correctness in the United States. 5. From now on, Trump's tariff policy is more like a weapon than a result, so Trump has announced that it may reduce tariffs on Mexico and Canada after two suspensions. The essence of tariff reciprocity itself is to reduce the import tariffs of the United States. 7. The additional tax revenue that tariffs can bring to the United States is approximately $100 billion per year. Although this tariff data can be helpful in filling the US fiscal gap, the cost is that American households will lose about $1200 in purchasing power. In addition, tariffs may lead to a reduction of $200 billion in the US gross domestic product, which is not a worthwhile business. 8. The ultimate goal of Trump's tariff should be to let the US economy enter an environment of "low inflation, low interest rate and strong employment". Make American manufacturing and energy supply chains more independent from China and Europe to achieve stronger economic dominance. But it is not possible to achieve this transformation through tariffs, it is a huge question mark! If Trump deliberately created the recession, with the deepening of the economic recession, the United States may not be able to really realize the return of manufacturing industry, because enterprises may choose cheaper production places instead of the United States. If the recession leads to a decrease in global market demand, American exporters may be more affected, resulting in a further expansion of the trade deficit. So even though Trump's policy objectives are reasonable, the implementation path may bring unexpected side effects. Conclusion: So from my personal point of view, Trump does not want to let the US economy decline, nor does he want to let tariffs lead to economic recession. It is not ruled out that he can think that the US Canada Mexico agreement can be solved through the weapons of tariffs, while promoting the ceasefire of the Russia Ukraine war. The cease-fire plan to reduce inflation is better than the plan to let the economy decline first and then rise. From the historical perspective of the United States, even the interest rate cut caused by the economic recession will take about 12 to 16 months to bring the interest rate back to a low point, and it will take about a month for the market to recover. At this time, not only the mid-term election has passed, but also Trump's term of office may be half over. It is not good to say whether the remaining half of the time can bring the economy back to the Biden era, let alone leave a good name in the history of the United States. A family can reduce some expenses due to excessive monthly spending, but it will never go bankrupt in order to reduce expenses. Although bankruptcy can also reduce monthly expenses, I don't think any family would use such a plan to control expenses. So I think Trump is the same. It's not over! Although this debate seems correct, it ignores a key issue. If the United States is bound to go into recession this time, will Trump try to delay the process of recession or accelerate it? The answer is likely to be the latter. If it is true that the U.S. economy will fail in 2025, then Trump is not the manufacturer of the recession, but the accelerator of the recession. Then the possibility of Trump's borrowing power is still high, but it is entirely for the sake of the results to be expected. Because Trump mentioned the problem of manufacturing reflow and tariffs during the election, unless Trump had predicted that the U.S. economy would inevitably decline by 2025 in 2024, this practice may not be successful. After all, when the Biden government ended, the economy and employment were very strong. Trump hopes that the market believes that he is the leader of economic recovery, not the initiator of recession. Trump hopes that the US economy will resume growth during his tenure, rather than recover in 2027. In the past 40 years, the policy model of the U.S. government is to maintain economic growth by means of interest rate cuts, fiscal stimulus, etc., but Trump may want to promote a forced manufacturing economy of "high employment, low inflation, and low interest rates", rather than a pure asset foam. This is why Trump did not directly call on Powell to cut interest rates, but tried to promote "economic transformation" through tariff and fiscal adjustment. This includes the return of manufacturing during Trump's election. In the past four years, the core strategy of the Biden government is to stabilize the market and rely on government incentives, such as financial subsidies, infrastructure bills, etc., but Trump prefers transactions and pressure to achieve his goals. Trump is not an "economic hawk" in the traditional sense. He pressed the Federal Reserve to cut interest rates for many times during 2017-2020, and even directly called Powell when the stock market fell. And this time, although he did not directly attack the Federal Reserve, he gradually built pressure on policy. His strategy is more like 'I'll give you a big stick first (tariffs), and then provide carrots (tax cuts)'. What Trump might do more is to let the economy go down and be indifferent. When the price drop triggered widespread panic among investors, he stood up to help the Federal Reserve cut interest rates to achieve market stability. After all, Trump's philosophy is to increase tariffs externally first, and then stimulate the economy internally by reducing taxes. In addition, Trump and cabinet members have repeatedly stated that the United States may enter a "transition" period, which may be a sign of decline. Therefore, tariffs are likely to "boost" the economic downturn and quickly complete the "deleveraging" of the market. But Trump may not like to let the U.S. economy enter a recession rhythm, so when the leverage is cleared to a certain extent, it will re stimulate the stock market through tax cuts and other means. In yesterday's "bull market and bear market" judgment, I put two key events, one is the cancellation of SLR, the other is the suspension of shrinking the table. Now we can add a third indicator, that is, when Trump announced the domestic tax cut, maybe the time when the US stock market is ready to move forward again. Of course, I hope it will not enter a recession before this. When will Trump announce tax cuts? I wonder if he will wait until the first quarter GDP data of the United States in April. The Last Last At present, the issue of the debt ceiling has been settled. In the second half of 2025, if the market expects the Federal Reserve to cut interest rates, Trump to cut taxes and the US debt problem to ease, then the US stock market and the crypto market may not have a rebound. This tweet is sponsored by @ ApeXProtocolCN | Dex With Apex