Trump Administration Creating Market Uncertainty to Push for Rate Cut? – Anthony Pompliano

# Trump Administration Allegedly Unleashing Uncertainty to Lower U.S. Treasury Yields Claims have surfaced suggesting that the Trump administration is deliberately creating market uncertainty to induce a decline in U.S. Treasury yields. Anthony Pompliano, co-founder of Morgan Creek Capital Management, articulated this assertion in an email titled "Is Former President Trump Intentionally Trying to Lower the U.S. Stock Market?" Summarizing Pompliano's points, he notes that as both a businessman and investor, Trump has historically evaluated the health of the U.S. economy through the stock market. Consequently, the general consensus has been that the Trump administration had no incentive to intentionally drive down stock prices. However, the current scenario suggests otherwise. Recently, Trump remarked on his plans to "lower rates and energy," indicating a robust strategy to reduce interest rates. The rationale behind this strategy is that the U.S. needs to refinance its $7 trillion debt in the next six months at lower interest rates. # Uncertainty as a Tool for Lowering Rates Analysts argue that the Trump administration is intentionally slowing economic growth through trade tariffs and creating market uncertainty. This strategy aims to push investors away from riskier assets like stocks and towards purchasing Treasuries, thereby lowering Treasury yields. Indeed, the yield on the U.S. 10-year Treasury note has declined from 4.8% earlier this year to 4.25% recently. The objective of this strategy is to pressure the Federal Reserve (Fed) to lower interest rates. Last year, Trump persistently urged Fed Chairman Jerome Powell to cut rates, a request Powell resisted. It now appears that Trump, along with economic advisor Scott Bessent, is attempting to directly influence the market. # Interest Rate Cuts to Stimulate Housing Market An interest rate reduction not only lowers government debt servicing costs but can also positively affect various sectors, such as the housing market and consumer lending. Lower interest rates are expected to reduce mortgage rates, thereby stimulating real estate transactions. This has led to predictions of a rejuvenated housing market. Additionally, lower rates can reduce borrowing costs, encouraging substantial consumer spending and boosting economic activity. Market research firm Calc reports a more than 75% likelihood of the U.S. reducing rates twice or more this year, though it also estimates a 38% probability of a recession. # Will the New Economic Policy Succeed? Trump and his administration have positioned their strategy as prioritizing "Main Street over Wall Street." Though the approach is controversial, it could earn positive reviews if it successfully lowers interest rates and avoids a recession. Only time will tell what impact this strategy will ultimately have on the U.S. economy.