#特朗普税改 has started releasing news again, right? Let's analyze it briefly. Trump is eager for the Federal Reserve to cut interest rates to keep the long-term U.S. Treasury yield below 4.5%, but the Fed chair completely ignores Trump. Trump is now continuing to cut taxes to fulfill his election promises, while also waiting for the government to run out of money and shut down, and the situation continues to escalate.

In short, short-term debt is about to mature, and the Federal Reserve must either cut interest rates or expand its balance sheet; otherwise, the government will shut down. It happened once in 2020, and the Fed later expanded its balance sheet to solve the problem. However, this time the situation is different from last time. Last time it was a pandemic; although expanding the balance sheet solved the issue, it caused a double hit on both bonds and stocks. This time, the situation is worse, compounded by the decoupling between China and the U.S. Continuing to cut interest rates or expanding the balance sheet may further exacerbate soaring CPI. Let's see what happens.