Recently, both the U.S. stock market and cryptocurrency market have experienced significant corrections, leaving investors feeling like they're on a roller coaster, with emotions rising and falling. Increased tariffs, high inflation, and a persistently high dollar index, coupled with poor economic data from the U.S., have made many people feel a jolt in their hearts: Is a 'trading recession' really coming?
Economic data collapse, Trump's 'hidden agenda' comes to light.
On March 3, the GDPNow forecast from the Atlanta Fed showed that the U.S. GDP growth rate forecast for the first quarter of 2025 plummeted to -2.82%. It's worth noting that just on February 26, this figure was +2.32%. In just five days, the expectation was directly downgraded by 510 basis points! This is the worst result for U.S. quarterly GDP forecasts since the COVID-19 pandemic in 2020.
However, in the eyes of some Wall Street old foxes, this is not a coincidence, but Trump's 'hidden agenda'. Former Lehman Brothers trader Larry McDonald bluntly stated in a recent podcast: Trump is deliberately creating an economic recession to pressure the Federal Reserve to cut interest rates and reduce government interest expenses.
McDonald pointed out: 'The Trump team is well aware that massive fiscal spending cannot curb inflation. They need a recession to lower interest rates and extend the debt maturity. This is the only way to escape the $37 trillion debt dilemma; there is no other option besides default.'
Trump vs. the Federal Reserve: The interest rate cut battle is about to ignite.
The conflict between Trump and the Federal Reserve has long been on the table. The Fed, in order to control inflation, has been hesitant to significantly cut interest rates, while Trump is as anxious as an ant on a hot pot, demanding immediate interest rate cuts. Why? Because high interest rates have caused U.S. government debt interest expenses to soar. If interest rates remain at the current level, next year, U.S. debt interest will reach $1.2 trillion to $1.3 trillion, more than defense spending!
It should be noted that U.S. fiscal revenue is only about $4 trillion, and rigid expenditures already account for the bulk of it. Coupled with interest expenses, the fiscal pressure is simply off the charts. Trump clearly does not want to take the blame, so he chooses to 'pressure the palace': by increasing tariffs, creating an economic recession, and even threatening to audit and optimize the Federal Reserve, he is putting pressure on the Fed to force interest rate cuts.
Short-term pain, long-term goal: Reshape the U.S. economy.
Nomura's analysis points out that the Trump administration's strategy is not only about pressuring interest rate cuts, but also a structural transformation. By reducing government spending and employment, and increasing tariffs, Trump intends to trigger a 'mild recession' to break the U.S. economy's dependence on government spending and promote the private sector as the dominant force for economic growth.
In the short term, this strategy will undoubtedly put tremendous pressure on the U.S. stock and cryptocurrency markets. However, in the long term, once the Federal Reserve initiates large-scale interest rate cuts, market liquidity will significantly improve, and the U.S. stock and cryptocurrency markets may usher in a new round of prosperity.
Perspective from the cryptocurrency circle: Danger and opportunity coexist.
As an old hand in the cryptocurrency circle, I feel both worried and hopeful about Trump's 'hidden agenda'. The worry is that a short-term economic recession and market correction could lead to significant losses for many investors; the hope is that once the wave of interest rate cuts begins, the cryptocurrency market will welcome an unprecedented liquidity bonus.
History tells us that every crisis is a breeding ground for opportunity. The 2008 financial crisis gave birth to Bitcoin, and the 2020 pandemic spurred the explosion of DeFi. This time, will the 'economic recession' created by Trump become the starting point for the next bull market in the cryptocurrency market? We will wait and see.
Conclusion: After hardship comes happiness, a bull market is to be expected.
Trump's 'hidden agenda' may cause the U.S. stock market and cryptocurrency circle to suffer in the short term, but the trend of interest rate cuts is already irreversible. For cryptocurrency investors, danger and opportunity coexist. In the darkest moments of the market, staying calm and seizing opportunities may hold the key to wealth in the next bull market.