Did the Trump administration deliberately let the stock market crash? A bold speculation by well-known investor Anthony Pompliano

The hottest topic in financial markets over the past two weeks has been: "Is the Trump administration deliberately crashing the U.S. stock market?"

The question was raised by Anthony Pompliano, now CEO of Professional Capital Management, who argues that the Trump administration's recent policies are not simply economic adjustments, but a well-planned strategy to force the Fed to cut interest rates by suppressing asset prices.

If this statement had been made before Trump took office, I am afraid it would have been considered absurd. After all, Trump is known as a businessman and investor, and he has repeatedly publicly stated that the performance of the stock market is an indicator of the health of the U.S. economy. However, the market is now in turmoil, and Trump's policies seem to be accelerating this decline, forcing people to rethink his economic strategy.

Pompliano believes that all this is not an accident, but a deliberate operation of the Trump administration. Does this bold speculation really hold up?

The Trump administration's goal: to lower interest rates and energy prices

Pompliano noted that the Trump administration's economic strategy revolves around lowering interest rates and energy prices, and the key issue is that the U.S. government needs to pay $7 trillion in debt over the next six months, and if it doesn't, it will have to refinance.

The problem is that the Trump administration does not want to refinance in the current environment of high interest rates above 4%, especially since the yield on the 10-year Treasury note was once as high as 4.8%. Therefore, the government's goal is to make the market environment uncertain enough to force investors to withdraw from the stock market and buy Treasuries instead, which in turn pushes down Treasury yields.

Create market panic and force investors to turn to the bond market

Pompliano quotes market analysts Kris Patel and Amit Is Investing to explain how this strategy works:

By raising tariffs and creating economic uncertainty, the market has raised doubts about growth prospects.

Investors, fearful of stock market risk, began buying Treasuries, pushing up bond prices and driving down yields.

After yields fall, the Federal Reserve will have more reasons to cut interest rates, further pushing market rates lower.

From the current market data, this strategy seems to be working. The 10-year yield has fallen to 4.25% from 4.8% in January, indicating that investors are turning sharply to the bond market.

The Fed vs. Trump's Game: Who Will Budge First?

Over the past year, Trump has publicly pressured Fed Chairman Jerome Powell to cut interest rates. However, Powell has always been unwilling to compromise, so the Trump administration and its economic adviser Scott Bessent decided to directly pressure the Fed to cut interest rates through market means.

The central question of this game is whether the Fed will cut interest rates in response to market pressures, or will it continue to resist pressure from the Trump administration.

Pompliano bluntly said that the Trump administration's current goal is not to make the stock market rally in the short term, but to ensure that the 10-year Treasury yield continues to fall, even if it may cause short-term panic in the stock market.

This strategy is bold, but the risk is that if the market is too volatile, the economy could fall deeper into recession, a price the Trump administration cannot afford.

The housing and consumer markets will benefit from interest rate cuts

Pompliano also mentioned that although this strategy may have a short-term impact on the stock market, it may still bring some long-term benefits, especially in the housing and consumer markets.

Kris Patel, market analyst, said: "When interest rates fall, more buyers will be attracted and many sellers will appear, which will help revitalize the housing market."

In addition, AI search engine Perplexity also explained the impact of interest rate cuts on the economy: "Lower interest rates can reduce borrowing costs, making it easier for consumers to buy homes, cars or pay for education, further stimulating economic activity."

Currently, prediction market Kalshi shows that market expectations for a rate cut in 2025 are rising, and there is now more than a 75% chance that there will be at least two rate cuts this year. However, there is also a 38% chance that the US will fall into recession in 2025.

All this suggests that the Trump administration's strategy could have painful short-term effects, but if it eventually succeeds in lowering interest rates, it may bring new growth momentum to the US economy.

Is this a completely new economic strategy, or a dangerous bet?

Pompliano argues that this is not a traditional economic policy, but a new economic strategy. The Trump administration's approach has caused great controversy by challenging conventional economic views of market stability.

However, such a strategy can also work. If the end result is falling interest rates, accelerating economic growth, and avoiding recession in the United States, the Trump administration's "big bet" could be seen as a successful economic reform.

However, everything is still full of variables. Pompliano said: "This is not the economic policy of your grandparents, but a bold experiment that has never been seen before. Markets are averse to uncertainty, especially when these policies come from specific factions in politics."

At present, the market and the government are still fighting, and the only thing investors can do is to pay close attention to the situation and prepare for various possibilities.

This article The Trump administration deliberately let the stock market crash? The bold speculation of well-known investor Anthony Pompliano first appeared in Chain News ABMedia.