#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, but the Federal Reserve Chairman is completely ignoring Trump. Trump is now continuing to cut taxes to fulfill his election promises, just letting the government run out of money and shut down, and the situation is escalating.

In short, short-term debts are 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; the Federal Reserve 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, both stocks and bonds suffered. 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 soaring CPI. Let's see how it plays out.