Why Trump Might Want a 20% Market Crash

Why Trump Might Want a Market Crash

Trump is many things. Subtle? Not one of them.

But beneath the bombast, he knows how markets work. So let’s walk through the potential blueprint…

1. Crash the Market, Force the Fed’s Hand

• A 20% drop in stocks = investor panic = flight to safety (U.S. bonds).

• Bond demand = yields fall.

• The Fed’s response? Cut interest rates to stabilise the economy.

• Lower rates = cheaper debt servicing = Trump can refinance America’s $34 trillion problem on the cheap.

 

2. Lower Rates = Cheaper Debt & Cheaper Everything

• Imagine refinancing $34 trillion from 5% down to 2.5%.

• That’s hundreds of billions in savings annually.

• Cheaper money fuels investment, housing, and infrastructure.

• The Fed becomes an unwitting sidekick in Trump’s comeback tour.

3. Tariffs + Recession = Economic Nationalism

• Trump adds 25% tariffs on foreign goods.

• Companies either eat the cost… or build in the U.S. to avoid them.

• Countries retaliate with tariffs of their own.

• U.S. farmers, producers, and manufacturers pivot inward.

Result? Cheaper goods made here, fewer imports, and a populist talking point:
“I brought manufacturing home. Biden shipped it overseas.”

4. Hurt the Wealthy, Help the Voter

• 94% of stocks are owned by just 8% of Americans.

• A crash mainly stings the wealthy.

• But if it brings cheaper groceries, gas, and goods for everyday people?

• Trump gets to say: “I hurt the billionaires to help the people.”

5. Crash Now, Rebound After

• Let Biden hold the bag for the collapse.

• Once Trump’s in, markets rally. He takes the credit.

• It’s the ultimate “buy-the-dip” presidency.

6. Use the Chaos for Political Ammo

• Trump thrives in disorder.

• Market swings become campaign soundbites.

• “The Fed ruined the economy… I’ll fix it.”

• “Woke investing crashed your 401k… I’ll ban ESG tomorrow.”

7. Volatility Helps the Smart Money

• While retail panics, big funds scoop up assets on sale.

• Option premiums skyrocket – hello income for the traders who know what they’re doing.

• Hint: Pulse Bars + SPX credit spreads = paydays in chaos.

It’s like a trading version of House of Cards… except this time, the house is the card.

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Fun Market Fact

In 1987, the Dow crashed 22.6% in a single day. But what most people forget?

It ended the year positive.

Markets love to overreact… and then quietly rebound while everyone’s still nursing their trauma.

Which is exactly why a 20% drop now could be politically useful – crash early, recover later, blame the Fed, and ride the bounce.

For traders using defined-risk setups like credit spreads, it’s the golden age of premium. You get paid to wait out the chaos – just like we teach in the SPX Income System.