Once they hit record hists, and Trump victories, American stocks shed trillion dollars in the middle of his dizzying back on tariffs and growing fears from recession.
While Trump played turbulence as a temporary “transition period” on the way to stronger economy, supporters and critics of the American presidents who were equally guessing without evidence that he deliberately tries to pick up on the market.
What happens to the US Stock Exchange?
Trump’s hithelf for economic policies have created insecurity – some investors who are known do not like.
Benchmark S & P500, which accompanies the performance of the 500 largest American companies, lost almost 5 trillion in the amount of 30. February 19. February.
10. Marta Tech-Heavy Nasdaq fell 4 percent – his worst one-day decline since September 2022. years.
Whether Trump plays a long game as he claims, the past month “also points out for the amount of uncertainty and variety of fronts,” Tara Sinclair, Director George Washington University Center for Economic Research, said Al Jazeera.
Index of economic policy uncertainty, which the Federal Bank St. Louisa products based on news on reporting on economic policies in February, in February hit its highest level from the height of the pandemic to 2020. years.
The global economic policy uncertainty index in January reached the highest point on records except 2020. May.
Why do some people claim that Trump wants to crash the stock market?
There are several unconfirmed theories about why Trump may want to crash the stock exchange, but boss among them is to make it try to make it easier to pay the national debt in the amount of 36 trillion in reducing interest rates.
Since the introduction of duty, Trump expressed concern about debt size and called federal reserves to lower interest rates.
In a recent interview with Fox’s news, he argued that “No one should never be rich when interest rates are great, because people can’t borrow money.”
The debt ratio to gross domestic product (GDP) of about 120 percent, federal debt is approaching the highest level since the end of World War II.
It is also expensive to pay – the US government last year spent more than 1 trillion of $ 1 only on interest pay.
Some trump arguments that he deliberately tries to cause economic pain to force a federal reserve to lower interest rates, which would be cheaper to refinance national debt.
“Trump sets a litigation on the stock exchange. The American government needs a $ 7 trillion in the next 6 months,” Crypto Influence and investor Thomas Kralow, which has more than 500,000 youtube followers, last week.
“Trump does not want to do this in the current 10-year-old yields. Therefore, the Stock Exchange will be dropped while pushing the bonds greater,” KRALOW said it would create “short-term pain, long-term profit.”
While the federal reserves brings its decisions independently of the White House and the US Congress, it usually reduces borrowing costs during severe economic conditions to encourage growth.
When interest rates are lower, the government also paid lower yields on US government bonds – essentially the type of loan government – thus reducing interest costs.
If the returns of the bond should be lowered, the US government could pay significantly lower interest in the debt required refinancing, which is expected to be about 9 trillion in the amount of Axel Funhoff, Professor in the School of Antwerp in Belgium.
“For a better part of the decade, the United States has used a historically low interest rates. These lower rates have enabled the government to finance their debt for about 2.7 percent,” Funhoff in Linkuda’s post in January.
Compared to this era of cheap borrowing, current interest rates are much higher: Yields on 10-year government bonds and 5-year treasury bonds were 4.3 percent, ie 4 percent, ie on Friday.
Why some trump critics say that he wants to ‘buy DIP’?
Different theories by circulating some critics suggests that it deliberately timely on the stock exchange to reward himself and his supporters, including conservative investors for wall streets and donkeys.
The proponents of this theory claim that Trump caused the market to make him and his allies “buy DIP” – in other words, buy supplies by discounting before the market rejects.
“(Trump) deliberately manipulates the stock exchanges, the markets descend to their rich friends, after that, the tariff appears, said that rich friends become richer …” X User Akasabrafella said last week.
So, does Trump actually want the stock market to fall?
While Trump administration played unrest in markets, no indications gave no indication that he actually wanted the stock prices down.
Indeed, Trump has often praised the performance of shares in his watch when the market was Bickel.
Kathleen Brooks, the founder of the Market Analysis Market Analysis, said that he did not believe that Trump deliberately tried to cause the market to fall.
“The American economy has reached the highlight in November and since American economic data is cherryed lower and surprisingly, the bond market had to play,” Brooks said Al Jazeera, adding that other property like Bitcoins also fell off his top.
“It is not unusual for the markets to move in this destroy. This undermines that the moves on the treasury market are conspiracy theories. Instead, there are good fundaments to fall,” she said.
Some market analysts also suggested that the market is overpriced and long delayed correction – Wall Street Lingo for a drop more than 10 percent of its peak.
Legendary Investor Warren Buffett, whose market moves are watching for their decades-long records by following the S & P 500, threw at least $ 134 billion in the stock in 2024. year that is widely interpreted as a signal that is too high.
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2025-03-17 11:50:00
