The Trump Card, Trump Risk Matrix, and MacroEdge Vision Update

In this 1/23 MacroEdge Midweek Report - our team dives into the 'Trump Card' - a powerful tool, the 'Trump Risk Matrix', and the Vision team provides an update.

Researchers included in this report:

Don Johnson - MacroEdge Chief Economist (@DonMiami3)

Six - MacroEdge Head of Research (@SixFinance)

Good Thursday evening MacroEdge Readers and Community,

This evening in our Midweek Macro Note - we’ll dive into the ‘Trump Risk Matrix’ - a look at potential drivers of a correction or equity slowdown under the Trump Administration. While growth signals continue to look fine, oil prices have come down in the last few days as the ‘Trump Card’ is utilized to jawbone prices (at least verbally), and small business optimism has rebounded substantially, and employment has fallen… are there any risks left in this market?

The last two years in particular have taught us a thing or two about macro thresholds required for minor corrections (5-10%) - and at maximum - the much broader drawdown seen in 2022 into mid-2023. Since that period of time as inflation has fallen (even though price levels are dramatically higher than 2019 levels) and unemployment has risen slightly - there have been only a few corrections… Where do we stand now… at the junction of a new administration, with new policies, new goals, and a new vision for the country? Let’s dive into the ‘Trump Card’ and the ‘Trump Risk Matrix’ - two new frameworks we can utilize to guide us through the beginnings of this new administration.

The ‘Trump Card’ Against Inflation and Interest Rates

‘The Trump Card’ is an extremely powerful tool utilized by Trump - rather effectively in many instances - to manipulate asset prices, oil prices, yields, and even the Fed Chairman, his opponents, and much more. This involves Trump going to the public through a variety of channels - through either the press directly, a press conference, or through Twitter/X /Truth Social to comment on one of the above categories. Just today we saw this multiple times regarding interest rates being way too high, as well as with oil - a core CPI driver.