Trump Threatens Fed

well this sucks last week we got a hint

that maybe the Trump Administration

would agree to a universal tariff

settlement between Canada Mexico Europe

in almost some form of a new Trade

Agreement where some of the quote

unquote unfairnesses that have existed

get resolved and Donald Trump is happy

as he's able to collect more tax revenue

from the external Revenue Service

without the uncertainties or retaliatory

tariffs or disaster that comes with a

real full-on trade war that is

significantly worse than what we had

seen since the 2018 trade war and

unfortunately coming at a time where the

labor market is significantly weaker

than what it was in 2018 that said that

hope might unfortunately be fading

extremely fast Donald Trump on Truth

social this morning lamb based

power for not cutting rates and helping

transition the United States through

this move towards the external Revenue

Service essentially Donald Trump on

Truth social saying the following the

FED would be much better off cutting

rates as us tariffs capitalizing tariffs

now by the way it's a proper noun uh to

start transition ease their way into the

economy do the right thing April 2nd is

Liberation day in America okay first of

all I thought inauguration day was

Liberation day so I think we're going to

have a lot of Liberation days from

Donald Trump but that's okay what

matters here is this message just tanked

the pre-market now I I'm not saying that

you know we've got something here that

uh uh that that with certainty is going

to create a market crash whatever no

what we're saying is markets continue to

hope that this tariff Warfare Fades away

but what we just got was Donald Trump

who tripled down on the Tariff Warfare

now look you know I think it's going to

be a little bit challenging for us to

pay for what we want to pay for with

tariffs alone we would have to have

almost blanket tariffs of between 16 to

25% on All Imports to even get close to

the idea that anybody making under

$150,000 wouldn't have to pay taxes and

even if we did that it wouldn't account

for the significant drop in trade or the

retaliatory tariffs we might face those

things combined could actually make it

that we'd realistically need somewhere

on 30 40% tariffs and it's likely we

would just end up in a deep dark

recession at which point you wouldn't be

paying income taxes anyway because you'd

lose your job and things would be even

worse now that might sound like a little

hyperbolic but the reality is tariffs of

such a magnitude when when we have an

economy that's so globally

integrated probably won't ever reach

that high of a level and they shouldn't

you wouldn't want them to reach that

high of a level because it would be bad

now I'm all for the government saving

money through Doge and eliminating waste

and fraud have to be careful with

exactly howwi we cut but what I'd like

to talk about and Aline on is the

Federal Reserve because I actually agree

with Donald Trump the Federal Reserve is

making a significant

mistake Jerome Powell at the Federal

Reserve said two things that I think are

completely discongruent on one hand he

said we think that inflation from

tariffs is going to be transitory and on

the other hand he said data is starting

to worsen the Soft Data is starting to

worsen and that could trickle over into

the hard data but it has not yet okay

Soft Data is sort of sentiment surveys

confidence expectations hard data is oh

my gosh ERS are down all

right why I think what Jerome Powell

said is critically in congruent is

simple on one hand you have him saying

tariffs will be transitory everything

will be fine we don't have to worry

about the inflation from tariffs yet on

the other hand he says but we don't want

to get ahead of the bad data in the

actual economy because uh well you know

we'll just wait and see we have the

luxury of

time yet then he also says but we'll

know very soon if the data rolls over

into the hard

data okay wait a second so you're

telling me you don't want to cut rates

because the little bit of inflation that

we're seeing in this tariff pull forward

of people rushing to import things into

the United States right now and stock up

the inventories right now before

Liberation day you're telling me this

sort of stock up is transitory inflation

you're not worried about it that this

time is different these are all things

we heard yesterday that this is not like

Co inflation that this is more like 2018

inflation which was

transitory then why would you not want

to get ahead of the economic weakening

so I actually wholeheartedly agree with

Donald Trump here that if we are going

to have a Liber Liberation

day then we should rapidly be

considering cutting rates because the

damage that could come from the to the

economy when these April 2nd tariffs

actually hit plus the retaliatory

tariffs will probably get on April 3rd

to April 15th somewhere in that range

when other countries figure it out not

going to be great a lot of things are

going to get hit

hard this doesn't have to happen I think

it's somewhat unnecessary now some

people say no Kevin this is just part of

the detox period the transition

period unfortunately drum Powell also

mentioned the four transitions this idea

of uh tariffs the regulatory transition

the fiscal uh uh you know spending

transition uh and just the geopolitical

transition that we're facing uh as as

all creating uncertainties this is the

most uncertain Federal Reserve we've

already had ever had and we've seen that

one of the members within the Federal

Reserve has turned into a dirty bear

suspecting GDP will be significantly

lower than uh what what the rest of the

board thinks suggesting you're starting

to get dissension within the board

you're some somebody's raising their

hand and they're going this is this is

bullcrap it's starting we're not quite

there yet so the question is when does

the FED capitulate and is it possible

that they do my thinking is yes if

Jerome Powell and this is interesting

because this is kind of a game changer

if Jerome Powell

capitulates because of data rolling over

from the April tariffs that hit the

Federal Reserve may end up cutting

rapidly way sooner than we think now I

want you to speculate this with me cuz

I'm going to give you a calendar of

dates here give you a quick little

spoiler so we're going to go to this

website uh and this website's going to

give us a calendar of dates that we want

to pay attention to but there's also uh

one specific page that's going to tell

you all about this delicious investment

into house hack you should check it out

the non accredited round is open it's

amazing go check out all the properties

the cash we have and the things we've

done at house hack.com sorry I had to do

that I had to no what we're actually

going to do is we're going to look right

here at the FED fomc calendar uh and

we're going to say the next meeting

after April is May 6th to 7th but folks

that's too soon you're barely going to

have your data by May 6 to 7th of what

April tariffs did right here baby with

the new summary of economic projections

June 17th to June 18th I think Donald

Trump's terorist could put the FED into

a serious tizzy and Panic by June that

is of course if Donald Trump hasn't

tried to fire Jerome Powell by the state

so things are about to get really

entertaining and I just encourage

everyone buckle up now the question is

how rapidly could the Federal Reserve

actually cut well my take is that very

rapidly uh we saw a 50 basis point cut

when the unemployment numbers moved uh

briefly in August and September we could

probably see a 100 basis point cut or

more because if the FED truly does

believe that this inflation is going to

be transitory the FED May panic and bail

out markets sign significantly earlier

than we think that does risk some repeat

of the

1970s but personally I'm actually not

worried about a 1970s repeat I want to

take advantage of that fed panic and

that's the moment I want to go shopping

for stocks so the bottom could be a lot

closer than a lot of people are thinking

who knows if we end up into a deep dark

long recession because the Federal

Reserve makes a policy mistake then

we're screwed