#特朗普税改

Is it starting to send messages again? Let's analyze briefly. 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 is completely ignoring Trump. Trump is now continuing to cut taxes to fulfill his election promises, while passively waiting for the government to run out of money and shut down, making things escalate further.

In short, short-term debt is maturing soon, 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 expanded its balance sheet to solve the problem. However, this time the situation is different from the last. Last time it was a pandemic; although expanding the balance sheet solved the problem, it led to a double whammy for debt and stocks. This time the situation is worse, compounded by the decoupling of 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.