Speculation has increased that President Trump may be deliberately slowing the economy through tariff policies and market disruption to pressure the Federal Reserve into lowering interest rates, a strategy some economists liken to a “J-curve” reset.
While Trump has publicly denied intentionally crashing the market, his social media activity and administration rhetoric have fueled debate about whether short-term economic pain is part of a broader plan for long-term gain.
Since President Donald Trump took office in January, stock market performance has dropped so dramatically due to his tariff plan that speculation has veered into whether the White House may be trying to slow economic activity on purpose.
At first, many dismissed this as conspiracy: This is a president who values the stock market’s opinion of him, who is an entrepreneur himself, and who campaigned on promises of a prosperous economy for Americans.
However, as stocks continue to nosedive and President Trump’s administration seems reasonably comfortable with that fact, analysts are beginning to wonder if the ‘hard reset’ theory has some truth to it.
President Trump has even hinted at the notion himself. Over the weekend, Trump reposted a video on his social media platform Truth Social titled “Trump is purposefully CRASHING the market” without adding any further comment.
The video, first posted on Elon Musk’s platform X, claims Trump is trying to engineer a cash push into treasuries, which could result in the Fed feeling pressure to slash interest rates as the economy slows.
Data does support the video’s theory to some extent. Namely, treasury yields (interest on the treasury) have collapsed as prices have risen, prompted by rising demand.
Moreover, Trump has not attempted to hide the fact that he wants interest rates to come down, in fact, he even said Fed chairman Jerome Powell’s job was on the line if he didn’t do so.
It’s worth noting that the Oval Office does not have the power to fire the Federal Reserve chairman and Powell and the Federal Open Market Committee (FOMC) are federally mandated to act independently of the government.
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