The stock market fell nearly 1,200 points on Wednesday as investors digested Fed Chairman Jerome Powell’s clarification of persistent inflation.
But this was not his only concern.
The Wall Street traders I talk to are also getting a little shaky. Donald Trump’s economic plansIncluding their tax-cutting intentions, are not being expressed clearly and are not being discussed seriously.
The same is true for regulation.
It appears the two are backing off from attacking Trump and suing the Des Moines Register for some inaccurate presidential polling.
put something in Elon MuskSmart but famously erratic mega-billionaire and now Trump’s top advisor.
He emerged as a budget-deal killer during the week, using his X social media platform nearly 150 times to lash out at the spending measure, some of which was needed, though some of it required Trump’s official approval. Normally it could have waited till he took office.
You have some legitimate reasons to be nervous, which isn’t much fun if your skin has been in this market for the last week or so.
So it’s time to remember that the alternative to Trumpian madness would be worse: yelling. kamala harris Selling hot socialism and marketism as hope and happiness.
There’s also a good chance that when Trump’s incoherent economic story finally cooks up, the markets and the economy will be just fine.
Trump becoming the second president was always going to be a strange experience.
His closest advisers are a mix of traditional supply-siders, such as the Treasury Secretary nominee Scott BesantReincarnated conservationist like a former hedge fund trader, VP-elect JD VanceAnd anti-Wall Street populists.
steve bannonThe political mastermind of Trump I is not in the second administration, but the famously enthusiastic populist runs an influential podcast.
He still has the President’s ear.
Then there is the mastermind of this madness – Trump himself.
The combative billionaire businessman, survivor of legal violence and assassination attempts, winner of the 2024 election against great odds, deserves the nickname “badass” and has little patience for getting his house in order.
Yes, I know Trump seems to be throwing up contradictions on all things economic.
He talks about a good balanced budget game and the need to reduce inflation, but says he won’t cut spending if it means cutting big-ticket items like Social Security.
He calls tariffs a beautiful thing, even if they are inherently inflationary.
Higher prices prompt bond traders to sell debt, causing interest rates to rise as they are now because a tariff is a tax on foreign goods and can lead to retaliatory duties.
threat of a rally killer
Trump loves the stock market going up, as if it were a scorecard of the success of his presidency.
But higher deficits and inflation from the tariffs could derail what’s left of the rally that vowed to reverse the economic malaise — uneven growth and inflation — that we lived through during the Biden-Harris years.
All of the above is a recipe for the market zigzag we are seeing.
And you know what?
The country will still be better off than the alternative.
“DOGE Boys” – There’s a Really Good Chance for Musk and Vivek Ramaswami – Perhaps our bloated government could cut it enough to placate the bond watchdogs, tariffs or no tariffs.
Trump could threaten tariffs to get a better trade deal.
The Trump tax cuts and deregulation will spur economic growth when they arrive, which markets love — plus, they help pay down the debt.
An added benefit: You won’t have to listen to Kamala Harris’ word salad.
So take a deep breath.
Let Trump’s madness unfold.
Much calm has been promised after the storm.
