#特朗普税改

Is the news starting again? Let's analyze briefly. Trump is eager for the Federal Reserve to cut interest rates to keep long-term US Treasury yields below 4.5%. However, the Federal Reserve Chairman completely ignores Trump. Trump is now continuing to cut taxes to fulfill his election promises, while waiting for the government to run out of money and shut down, which will escalate the situation.

It's simply that short-term debt is maturing soon, and the Federal Reserve has to either cut rates or expand its balance sheet, otherwise the government will shut down. It happened once in 2020, and the Federal Reserve later expanded its balance sheet to solve the problem. However, this time the situation is different from last time. Last time was due to the pandemic; although expanding the balance sheet solved the issue, it led to a double hit on bonds and stocks. This time, the situation is worse, compounded by the decoupling between China and the US. Continuing to cut rates or expand the balance sheet may further exacerbate the skyrocketing CPI. Let’s see how it goes.