President Donald Trump shared a video on Truth Social claiming he is “Purposely CRASHING The Market.” The video, which predates the president’s tariff announcement on Wednesday, asserts that Trump is crashing the market by 20 percent this month as part of a secret strategy. The video proposes that Trump is attempting to push cash into treasuries, forcing the Fed to slash interest rates in May. It suggests this would allow the Fed to refinance trillions of debt inexpensively, weaken the dollar, and drop mortgage rates.
The video claims this is “a wild chess move, but it’s working.”
Furthermore, the video suggests the tariffs will force companies to build in the U.S. to dodge the tariffs and that farmers will sell more products domestically, bringing grocery prices down. However, many economists and analysts are skeptical of this narrative. Warren Buffett has criticized Trump’s tariffs, suggesting they are essentially a tax on goods paid by consumers as corporations pass along increased prices to buyers.
“Over time they’re a tax on goods,” Buffett said in March, emphasizing that the idea of tariffs benefiting the economy is flawed.
Trump’s market strategy critiqued
Several close Trump allies and administration officials did not defend the wisdom of a president promoting the idea that he is intentionally crashing the stock market.
“I have no idea,” said former House Speaker Newt Gingrich when asked about the video. Marc Short, Trump’s former White House legislative affairs director, said, “I suppose one way to induce the Fed to lower rates would be to crash the market, but that seems in line with the viewpoint among the mercantilists in this administration, that crashing our economy is a way to solve the trade deficit. If Americans can no longer afford to buy goods and services, it solves the trade deficit.
I’m kind of at a loss for words.”
One Trump mega-donor, who focuses on stock market performance, responded with multiple crying emojis, concluding that the new trade war and Trump’s apparent embrace of crashing the stock market is “NOT GOOD.”
The White House did not immediately respond to a request for comment on the president’s post. Most Americans are bracing for a potentially lengthy period of economic hardship, with the stock market dive pummeling working-class retirement savings and 401(k)s. On Thursday, global financial firm J.P. Morgan Chase raised its global recession forecast.
Fox Business’ Stuart Varney summarized the mood during coverage of the market sell-off: “That’s a probability, not a possibility.”