Is #特朗普税改 starting to release news again? Let's do a simple analysis. Trump is eager for the Federal Reserve to cut interest rates to keep long-term U.S. Treasury yields below 4.5%, but the Federal Reserve Chairman completely ignores Trump. Trump is now continuing to cut taxes to fulfill electoral promises, casually waiting for the government to run out of money and shut down, making the situation escalate further.

In short, short-term debts are about to mature, and the Federal Reserve will either cut interest rates or expand its balance sheet; otherwise, the government will shut down. It happened once in 2020, and the Federal Reserve later also expanded its balance sheet to solve the problem. However, this time the situation is different from last time. Last time was the pandemic; although expanding the balance sheet solved the issue, it led to a double whammy for stocks and bonds. This time, the situation is worse, compounded by the decoupling of China and the U.S., and continuing to cut rates or expand the balance sheet may further exacerbate soaring CPI. Let's see how it goes.