Did the Trump administration intentionally crash the stock market? Well-known investor Anthony Pompliano's bold speculation

Over the past two weeks, the hottest topic in the financial markets has been: "Is the Trump administration deliberately crashing the US stock market?"

This question was raised by well-known investor Anthony Pompliano (current CEO of Professional Capital Management), who believes that the recent policies of the Trump administration are not simply economic adjustments, but a carefully planned strategy to force the Federal Reserve to cut interest rates by suppressing asset prices.

If this claim had been made before Trump took office, it would probably have been considered absurd. After all, Trump is known for his image as a businessman and investor, and he has publicly stated many times that the performance of the stock market is an indicator of the health of the US economy. However, now that the market is in turmoil, and Trump's policies seem to be accelerating this downward trend, one cannot help but rethink his economic strategy.

Pompliano believes that this is not an accident, but a deliberate manipulation by the Trump administration. Is this bold speculation really valid?

The Trump administration's goal: to lower interest rates and energy prices

Pompliano points out that the Trump administration's economic strategy is mainly focused on lowering interest rates and energy prices, and the key issue is that the US government needs to pay $7 trillion in debt within the next six months, and if it does not pay, it must be refinanced.

The problem is that the Trump administration does not want to refinance at the current high interest rate environment of over 4%, especially when the 10-year Treasury yield has once reached as high as 4.8%. Therefore, the government's goal is to make the market environment sufficiently uncertain, forcing investors to withdraw from the stock market and turn to buying Treasuries, thereby pushing down the Treasury yield.

Creating market panic to force investors to turn to the bond market

Pompliano cites the views of market analysts Kris Patel and Amit Is Investing to explain how this strategy works:

1. By raising tariffs and creating economic uncertainty, the market's growth prospects are called into question.
2. Investors, fearing stock market risks, begin to massively purchase Treasuries, pushing up bond prices and lowering yields.
3. After the yield declines, the Federal Reserve (Fed) will have more reason to cut interest rates, further driving down market interest rates.

Looking at current market data, this strategy seems to be working. The 10-year Treasury yield has fallen from 4.8% in January to 4.25%, indicating that investors are significantly shifting towards the bond market.

The Fed's and Trump's game: who will blink first?

Over the past year, Trump has publicly pressured Fed Chair Jerome Powell to cut interest rates. However, Powell has been unwilling to compromise, so the Trump administration and its economic adviser Scott Bessent have decided to use market means to directly pressure the Fed to cut rates.

The core issue of this game is whether the Fed will succumb to market pressure and cut rates, or continue to resist the Trump administration's pressure.

Pompliano bluntly states that the current goal of the Trump administration is not to make the stock market rebound in the short term, but to ensure that the 10-year Treasury yield continues to decline, even if this may trigger short-term market panic.

Although this strategy is bold, its risk is that if the market turmoil becomes too severe, the economy may fall into a deeper recession, which would be a cost the Trump administration cannot bear.

The housing and consumer markets will benefit from rate cuts

Pompliano also mentions that although this strategy may have a short-term impact on the stock market, it may also bring some long-term benefits, especially in the housing and consumer markets.

Market analyst Kris Patel points out: "When interest rates decline, it will attract more buyers, and many sellers will also emerge, which will help revive the housing market."

In addition, the AI search engine Perplexity also explains the impact of rate cuts on the economy: "Lower interest rates can reduce borrowing costs, making it easier for consumers to purchase homes, cars, or pay for education, further stimulating economic activity."

Currently, the Kalshi prediction market shows that the market's expectation for rate cuts in 2025 is rising, with over 75% probability of at least two rate cuts this year. However, there is also a 38% probability that the US will fall into an economic recession by 2025.

All of this suggests that the Trump administration's strategy may bring painful short-term impacts, but if it can ultimately succeed in lowering interest rates, it may bring new growth momentum to the US economy.

Is this a new economic strategy or a dangerous gamble?

Pompliano believes that this is not a traditional economic policy, but a completely new economic strategy. The approach taken by the Trump administration challenges the traditional economic view of market stability, and has therefore sparked a lot of controversy.

However, this strategy may also work. If the end result is a decline in interest rates, accelerated economic growth, and the United States avoiding a recession, then the Trump administration's "high-stakes gamble" may be seen as a successful economic reform.

However, everything is still full of variables. Pompliano said: "This is not your grandfather's economic policy, but a bold experiment never seen before. The market hates uncertainty, especially when these policies come from a specific political faction, which makes them more controversial."

At present, the struggle between the market and the government is still ongoing, and the only thing investors can do is closely monitor the situation and prepare for all possibilities.