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Analysis: Trump's Refusal to Reduce Fiscal Deficit Contradicts Goals, Inevitable Bankruptcy on Current Financial Path
Summary: According to trading information platform Kobeissi Letter, the irony of the situation between Elon Musk and Trump is that eliminating the US fiscal deficit could actually achieve all of President Trump's economic goals at once. Firstly, eliminating deficit spending would reduce the amount of national debt issuance, thereby lowering bond yields. This would also lower ...
According to trading information platform Kobeissi Letter, the irony of the situation between Elon Musk and Trump is that eliminating the US fiscal deficit could actually achieve all of President Trump's economic goals at once.
Firstly, eliminating deficit spending would reduce the amount of national debt issuance, thereby lowering bond yields. This would also lower the inflation rate, allowing the Fed to cut interest rates and stabilize the bond market. In fact, the bond market was the reason for the turnaround in the trade war in April, when the 10-year Treasury yield soared above 4.60%. To some extent, reducing deficit spending would allow Trump to exert more tariff pressure to narrow the trade deficit. Although trade wars are seen as short-term pain for long-term gain, the true application of this phrase is in cutting deficit spending.
With Musk's continued public statements about the debt crisis, more and more Americans are starting to pay attention to this issue. Since the stimulus measures during the 2020 pandemic, bankruptcy is the inevitable outcome on the current financial path in the US.
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Link: Analysis: Trump's Refusal to Reduce Fiscal Deficit Contradicts Goals, Inevitable Bankruptcy on Current Financial Path [Copy]
