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Is Trump Trying to Engineer a Recession?
Traders are starting to price in the possibility that the U.S. economy might fall into a recession - and one Wall Street veteran says that might actually be the Trump administration's plan.

Yes, he does. If recession is likely / has to happen "on your watch" (which seems more likely now) - then having recession as early as possible in your term is preferable, and may even be beneficial:

1. He could (and would) blame Biden (TFG) for the "horrible economy" and will claim that he "fixed it" when economy recovers.

2. Recessions come and go, inflations accumulate. Recessions are generally disinflationary, which could help his "inflation fighter" image.

3. Recent recessions have been short in duration, due to either very generous "stimulus" packages and/or The Fed rapidly lowering interest rates to stimulate business and consumer borrowing and depress savings rates, which in theory should encourage and lead to higher spending, helping the economy recover quickly, but in current environment of Trump's "unpredictability" and consequent general business "uncertainty" the Fed may have a dilemma of lowering Fed rates quickly and risking another bout of higher inflation, which has picked up in recent months. But then he could / would blame the Fed for it.

4. He wants to bring down the USD versus other currencies which [he hopes] could boost exports and reduce borrowing costs and so-called "trade deficit" - there is even talk about "Mar-a-Lago Accord" promoted by Bessent (an obvious copycat attempt of Reagan's 1985 "Plaza Accord" / 1987 "Louvre Accord," with a 'tariff twist' and personal side-benefit of 'Mar-a-Lago' enshrined in economic history) though I doubt it would be successful.

More likely it would backfire and be harmful, like tariffs and bullying of US trading partners / allies, especially on issues that have nothing to do with balance of trade, making the pretext of "trade deficits" obviously false:

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#16 | Posted by snoofy at 2025-03-07 11:24 AM
Any gain there is more than undone, just with the on-paper math, simply by factoring in the tariffs.

Ah, that "most beautiful word - tariff" ... another populist idea Trump stole from Democrats, who have been champions of tariffs as protectionist measure on behalf of unions... not that it actually worked to protect the organized American Labor (unions now are at ~10% total, ~6% private labor force), only making it more expensive and "pricing [some] US goods out of the global and domestic markets."

Trump's guru / influencer on tariffs is lifelong Democrat Prof. Peter Navarro.

At least, UAW bosses, as usual, approve of [Trump's] tariffs: "Tariffs are a powerful tool in the toolbox for undoing the injustice of anti-worker trade deals... [UAW] is in active negotiations with the Trump Administration about their plans to end the free trade disaster ... and looks forward to working with the White House to shape the auto tariffs in April to benefit the working class."

And tariffs don't solve the non-issue / non-problem of "national trade deficits" - just create disruptions and big "uncertainty" headaches for supply chain managers.

In a capitalist country / society, national "trade deficit" (bilateral or total) is irrelevant and is just an interesting statistic having no significant economic value (other than possibly tracking supply chains and bottlenecks), except in Trump's warped brain. Countries have very little direct trade between themselves - companies usually import and export goods, depending on supply and demand. For example, if you buy a Rolls-Royce for yourselves and Bentley or Mercedes for your mistress, does that mean the US now has a "trade deficit" with Germany, and "Germany" now has to buy equivalent $$ amount in goods from the US?

What's more, trade deficits not only do not lead to inflation, they help maintain USD "reserve currency" status and may help finance the US gov't debt, as China, Japan and many other countries have been doing until recently.

The US has a heavy equipment and service "trade surplus" with the "rest of the world" including China. Trade "deficit" is often a sign of strong economy and provide millions of retail and wholesale trade-related jobs, including in manufacturing.

Last time the US had "national trade surplus" was in 1970s - those were the "good times," right? "Malaise," stagflation...

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#18 | Posted by snoofy at 2025-03-07 05:34 PM
Connecting some dots here. Tell me if I'm connecting them good!
Trump is following a policy that, if it achieves the stated goal, will bring about malaise and stagflation.

With economic and political caveats re tenuosly connecting "stable genius" Trump to word "policy" instead of to word "tool" and assuming he is "successful" in using it/them to logical conclusion, then you're absolutely "connecting them good!"

Read the AP article in my post to see a perfect example of Maslow's Law [of instruments]: "When your only tool is a hammer, everything looks like a nail."

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That's way too much to read for some readers, if not all readers.
Amend prior instructions to include generation of an Executive Summary for lengthy responses

Just read what' in bold
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