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If Powell was fired, or pushed out, do you think that markets would interpret this as a good thing? My opinion, absolutely not. The macro is already knee deep in sh*t.
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Might not be the most popular analysis, but bear with me.
The Objective Reality: - A multi-trillion dollar, highly inflationary fiscal package has just become law.
- The Federal Reserve will be forced to maintain a more hawkish stance (higher rates for longer).
- Specific, new, and broad-based tariffs are being actively implemented, increasing global trade friction.
- The US Dollar (DXY) is strengthening, creating a major headwind for risk assets.
- The oldest, largest, and most conviction-driven wallets in both Bitcoin and Ethereum have moved billions of dollars to exchanges, signaling a clear intent to sell.
Market's Denial: - Clinging to the "TACO" (Trump Always Chickens Out) narrative, betting that the tariff threats are a bluff.
- Focusing on long-term, highly optimistic chart patterns and price targets while ignoring the immediate macro storm.
- Generating low-volume weekend rallies based on hope rather than substance.
This disconnect is not just strange; it is the textbook definition of a late-stage distribution phase, where the "smart money" is selling to a crowd that is still high on the previous bullish hype.
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Let's look closer on the 'Big Beautiful Bill' passed both chambers in the u.s, and waiting for being signed into law 😂:
Subtitle C of Title VII: a $5,000,000,000,000 ($5 trillion) increase in the debt limit**[cite: 95]. This is the government giving itself the room to borrow for this new spending and reduced revenue.
How does this compare to recent history?
The American Rescue Plan (2021): This was a **$1.9** trillion stimulus package. It was passed when the economy was already recovering from the pandemic and is widely cited by economists as a major contributor to the high inflation seen in 2022 and 2023.
The CARES Act (2020):** This was a **$2.2 trillion** package passed in response to the massive deflationary shock of the COVID lockdowns.
The H.R. 1 bill represents a fiscal injection on the same massive scale as the COVID-era stimulus packages. However, it is being injected into a completely different economic environment. The COVID bills were a response to an economic collapse. H.R. 1 is being passed into an economy with an already tight labor market and inflation that the Fed is actively trying to fight.
In this context, the bill is not just inflationary; it's a direct, multi-trillion-dollar challenge to the Federal Reserve's efforts to stabilize prices.
So lets get ready for a possible 'last hurrah' this weekend 👍😂