Why do Trump's supporters say he wants to collapse the US stock market? | Donald Trump News

The US stock market had uneven driving after the election of the United States President Donald Trump in November.

After hitting record maximums after Trump's victory, US shares threw trillions of dollars against his dizzying messages back and forth for tariffs and growing fears of recession.

While Trump played turbulence as a temporary “transition period” on the way to a stronger economy, supporters and critics of the President of the United States have speculated without evidence that he may be trying to deliberately collapse the stock exchange.

What happens to the US stock market?

Trump's convincing economic policy has created uncertainty – something that investors do not like in some way.

Benchmark S&P500, which tracks the performance of 500 of the largest US companies, has lost nearly $ 5 trillion in value since its peak since February 19th.

On March 10, the technological heavy NASDAQ fell by 4 percent, its as much decline from the day of September 2022.

Whether Trump plays a long game, as last month, it stands out for the amount of uncertainty and the diversity of fronts, “Tara Sinkler, director of the University of Economic Research, told Al Jazeera Jazeera Washington.

The Index of the Uncertainty of Economic Policy, which the Federal Reserve Bank of St. Louis, produces on the basis of the news of economic policy issues, reached its highest level in February from the midst of the Covid-19 pandemic in 2020.

The Index of the Uncertainty of Global Economic Policy in January reached its highest point for records, except in May 2020.

Why do some people claim that Trump wants to collapse the stock exchange?

There are several unjustified theories of why Trump may want to collapse the stock exchange, but the main among them is that he is trying to facilitate the payment of US national debt of $ 36 trillion by reducing interest rates.

Since taking office, Trump has expressed concern about the amount of debt and called on the Federal Reserve to reduce interest rates.

In a recent interview with Fox News, he claims that “no one ever becomes rich when interest rates are high because people cannot borrow money.”

With the ratio of debt to gross domestic product (GDP), about 120 percent of the federal debt is approaching its highest level since the end of World War II.

It is also expensive to pay off – the US government spent over $ 1 trillion last year only on interest payments.

Some Trump supporters say he deliberately tries to cause economic pain to force the Federal Reserve to reduce interest, which would make it more cheap to refinance national debt.

“Trump creates a collapse on the stock exchange. The US government has to refinance a $ 7 trillion debt over the next 6 months, “said Crypto Influencer and investor Thomas Kralow, which has more than 500,000 YouTube followers, Has said last week.

“Trump does not want to do this at current 10 years. That is why it leaves in the stock market to drop, while raising the prices of bonds higher, “said Kralov, adding that this would create” short -term pain, long -term profit “.

While the Federal Reserve makes its decisions regardless of the White House and the United States, it usually reduces the cost of occupying during difficult economic conditions to stimulate growth.

When interest rates decrease, the government also pays a lower return on the bonds of the US Department of Finance – essentially a type of government loan – thus reducing interest costs paid under unpaid debt.

If the bond yield is reduced, the US government will be able to pay significantly lower debt interest payments, which needs refinancing, which is expected to amount to about $ 9 trillion in 2025, according to Axel Funhof, a professor at the Antwerp school in Belgium.

“Over the bigger part of a decade, the United States has benefited from historically low interest rates. These lower rates allowed the government to finance its debt in rates about 2.7 percent, “Funhof said in LinkedIn Post in January.

Compared to this era of cheap loans, current interest rates are much higher: the yield of 10-year bonds of finance and 5-year bonds of the Ministry of Finance are 4.3 percent and 4 percent respectively, on Friday.

Why do some Trump critics say he wants to “buy the immersion”?

A different theory, spread to some Trump critics, suggests that he deliberately tanns the stock market to reward himself and his supporters, including conservative Wall Street investors and the executive directors of Magie Silicon Valley.

Proponents of this theory claim that Trump is challenging a market so that he and his allies can “buy the immersion” – in other words, buying shares at a discount before the market bounces back.

“(Trump) deliberately manipulates the stock markets …. Tariffs scare, the markets go down to his wealthy friends, buy the immersion, then the tariff, the stock exchange goes back, said that wealthy friends are getting better… He has to be investigated, “said X Akasabrafella user last week.

So Trump actually wants the stock exchange to collapse?

While the Trump administration has played the turmoil in the markets, it has not given any indication that it actually wants the stock prices to decrease.

In fact, Trump in the past often boasted the work of his watch when the market was scourge.

Kathleen Brooks, the founder of the Minerva Analysis market analysis company, said he did not believe Trump was deliberately trying to get the market to fall.

“The US economy has reached its peak in November, and since then, US economic data has been a tendency to be more low and surprisingly away. This means that the bond market had to play catching up, “Brooks told Al Jazeera, adding that other assets like Bitcoin also fell from their peak.

“It is not uncommon for markets to move in tune that way. This undermines the view that the moves of the finance market are conspiracy theory. Instead, there are good main reasons for the decline, “she said.

Some market analysts have also suggested that the market has been overestimated and long overdue – Wall Street Lingo for a decline of more than 10 percent of its peak.

The legendary investor Warren Buffett, whose market movements have been carefully observed due to his decades, a record for superiority of the S&P 500, dumped at least $ 134 billion in 2024 in a sale, which was widely interpreted as a signal that the market was working too hot.