Federal Reserve vs. Trump: Who Controls Interest Rates?
Published: 2025-03-02
Status:
Available
|
Analyzed
Published: 2025-03-02
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
The Trump administration intends to reduce long-term US Treasury yields.
"The Trump Administration wants to lower the yields on long-term us treasuries."
Pending
A massive market rally is predicted if the Trump administration succeeds in lowering long-term US Treasury yields.
"if Trump and his team manage to do this the result could be a massive rally in the markets"
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The Trump administration plans to increase US oil production by 3 million barrels per day.
"increasing us oil production by 3 million barrels per day"
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Cutting government spending is projected to lead to less bond issuance and lower bond yields.
"Scott wants to cut spending less spending means less Bond issuance and lower bond yields"
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Increased oil production is expected to reduce inflation and boost demand for US bonds.
"Scott wants oil production to increase more oil production means less inflation and more US Bond demand"
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Resolution of conflicts in the Middle East and Ukraine by the Trump administration could decrease geopolitical uncertainty, leading to increased foreign investment in bonds.
"Trump's efforts to quickly resolve conflicts in the Middle East and Ukraine could reduce geopolitical uncertainty resulting in more Bond buying by by Foreign investors"
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The Federal Reserve has been reducing its US bond holdings through quantitative tightening (QT).
"the FED has been slowly reducing its Holdings of us Bonds in a process known as quantita of tightening or QT"
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The Federal Reserve is considering reducing the pace or halting quantitative tightening (QT).
"the minutes AKA summary of the fed's most recent meeting revealed that it's considering slowing down or even stopping qt"
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Reducing or stopping QT by the Fed could help alleviate the burden of US bond purchases and limit the drain on bank reserves.
"by reducing or stopping QT the FED can effectively share some of the burden of buying US bonds and minimize the amount of Bank Reserves this will drain"
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Reduced bond supply and increased demand are predicted to raise bond prices, lower yields, and consequently reduce long-term interest rates.
"this restriction in Supply and the increase in demand would cause bond prices to rise lowering their yields and lowering long-term interest rates by extension"
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Maintaining real GDP growth around 3% is considered the most achievable component of the 333 plan.
"keeping real GDP around 3% will be the easiest to achieve"
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Significant foreign investment, particularly $600 billion from Saudi Arabia, is expected to boost US economic growth.
"The Trump Administration has also been trying to secure large amounts of foreign Investments with at least $600 billion of investment expected from Saudi Arabia and this will also increase economic growth"
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Increased consumption by individuals with dual income streams is expected to boost GDP, as consumption comprises 70% of it.
"70% of US GDP is consumption and it goes without saying that people with two income streams will consume more and this will boost GDP"
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Achieving an annual budget deficit of 3% of GDP necessitates a reduction in government spending exceeding $1 trillion.
"lowering annual budget deficits to 3% of GDP therefore requires reducing government spending by more than one trillion dollar"
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A potential executive order to abolish the Department of Education is being considered by Trump primarily for cost-cutting reasons, given its significant budget.
"Trump has reportedly considered assigning an executive order to abolish the Department of Education when you consider that the Department of Education spent almost $270 billion in 2024 it's evident that this would primarily be for cost cutting reasons"
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The primary objective of Trump's tariffs is to generate revenue by taxing imported goods from other countries.
"the purpose of Trump's tariffs is to raise as much money as possible by practically taxing other countries"
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Trump has indicated that tariffs on goods from Canada and Mexico will proceed as planned.
"more recently Trump indicated that the tariffs on Canada and Mexico would actually be going ahead as planned"
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While 10% tariffs on China are expected to cause inflation, China might devalue its currency to preserve export competitiveness.
"it's assumed that these 10% tariffs would result in inflation but it's possible that China could choose to devalue its currency to maintain its export dominance"
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China's retaliatory tariffs against the US are considered largely symbolic, as its struggling economy cannot afford a trade war.
"China is evidence of this its retaliatory tariffs against the US were largely symbolic according to multiple reports and this makes sense given that the Chinese economy is struggling it can't afford a trade War"
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The goal of increasing US oil production by 3 million barrels per day is unlikely to be achieved domestically due to the substantial production increase required.
"Scott's third policy of increasing domestic oil production by 3 million barrels per day will likely not be done domestically if only because it would require an almost 20% increase in production per the US Energy Information Administration"
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The implementation of the 333 plan is predicted to be bullish for markets due to its impact on bond supply and demand.
"the ongoing implementation of the 33 33 plan could be bullish for the markets just because of the effects this will have on the supply and demand for bonds"
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The most favorable market scenario involves the successful implementation of the 333 plan before the debt ceiling is raised.
"the most bullish scenario for the markets would be for the plan to succeed before the debt seiling is raised"
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A US government default is the most bearish market scenario, which could occur if the debt ceiling is not raised before the Treasury General Account (TGA) is fully depleted.
"the most bearish scenario for the markets though would be if the debt ceiling doesn't get raised before the tge is completely drawn down and this could cause the US government to default"
Pending