It seems that Donald Trump has supported a theory suggesting that he is intentionally causing the stock market to go down by implementing tariffs. This could be a strategy to pressure the Federal Reserve into lowering interest rates.
The president shared a video created by a fan that explained this tactic as a clever move in a game of chess, with the potential benefit of allowing the country to refinance a large amount of US debt at a lower cost.
The clip claims Trump will crash the stock market by 20 per cent this month ‘on purpose’ to weaken the dollar and lower mortgage rates.
However, the video’s additional claims that the controversial tactic has Warren Buffet’s support were shot down by the veteran investor.
He put out a denial via his firm Berkshire Hathaway on Friday. The video has also since received a community note on Twitter adding this context.
‘There have been rumors spreading on social media platforms such as Twitter, Facebook, and Tik Tok about statements attributed to Warren E. Buffett. It is important to clarify that all such rumors are untrue,’ stated an official communication.
Buffett – long a skeptic of tariffs – told CNBC that he would not make a public statement on the agenda until Berkshire’s annual meeting on May 3.
In a subsequent post, Trump directly urged Federal Reserve Chairman Jerome Powell to slash interest rates and ‘stop playing politics’.
Donald Trump (pictured) shared what a fan believed was his ultimate end-game strategy for the tariff agenda that forced billionaire Warren Buffet to issue a rare denial
Buffet put out a statement via Berkshire Hathaway later Friday denying that he said that ‘Trump is making the best economic moves he’s seen in over 50 years’
‘This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates. He is always ‘late,’ but he could now change his image, and quickly,’ Trump wrote.
‘Energy prices are down, Interest Rates are down, Inflation is down, even Eggs are down 69%, and Jobs are UP, all within two months – A BIG WIN for America.’
But Powell on Friday gave a dismal forecast in his most strident comments yet as Trump attempted to draw him into a game of economic chicken.
‘We face a highly uncertain outlook with elevated risks of both higher unemployment and higher inflation,’ Powell said at an event just outside Washington, DC.
‘While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent.’
Powell also cautioned that Trump’s tariffs were higher and broader than expected.
‘It is now becoming clear that the tariff increases will be significantly larger than expected,’ Powell added. ‘The same is likely to be true of the economic effects, which will include higher inflation and slower growth.’
Wall Street interpreted his comments, more forthright than usual, as a clear statement that he has no intention of cutting rates at a time when Trump has introduced such extreme downward pressure.
Trump’s claim that he is deliberately trying to crash the economy to force rate cuts only adds to the confused messaging emerging over the tariffs.
He has previously stated that the levies are designed to generate jobs for Americans by increasing domestic production, with no mention of curbing interest rates.
The president has been on the attack ever since Wednesday’s ‘Liberation Day’ event announcing the tariffs, which have sent Wall Street to its worst two-day wipeout in history – with $6.6 trillion wiped off the value of US stocks.
Trump directly urged Federal Reserve Chairman Jerome Powell to slash interest rates and ‘stop playing politics’
It came as the odds of a US recession this year skyrocketed above 60 percent, according to the prediction market Kalshi.
Trump’s press secretary Karoline Leavitt said: ‘To anyone on Wall Street this morning, I would say trust in President Trump.’
Taking to Truth Social, Trump wrote: ‘Big business is not worried about the Tariffs, because they know they are here to stay, but they are focused on the BIG, BEAUTIFUL DEAL, which will SUPERCHARGE our Economy. Very important. Going on right now!!!’.
He also posted say that his administration are ‘working very hard on a Deal to save TikTok’ and that are ‘made tremendous progress’.
‘The Deal requires more work to ensure all necessary approvals are signed, which is why I am signing an Executive Order to keep TikTok up and running for an additional 75 days,’ he wrote.
In another post, he added: ‘ONLY THE WEAK WILL FAIL!’.
Meanwhile, China is retaliating against the United States in a sign of trade war escalation.
After plunging Thursday, stocks crashed again on Friday as it looks increasingly likely that President Donald Trump’s tariffs will cause a global recession.
US stocks have lost about $11.1 trillion in value since January 17 — the Friday before President Trump began his second term, according to MarketWatch analysis Dow Jones Market Data.
About $6.6 trillion of that was wiped out on Thursday and Friday alone — marking the biggest two-day loss of shareholder value ever recorded, according to the data.
Markets have seen bigger percentage drops, such as in 1929 when they tumbled 25 percent over October 28 and 29 that year, but never as much in dollar terms.
This week’s carnage has hit ordinary Americans whose retirement savings, including 401(K) are tied to the market.
Trump’s own post goes against what he said earlier Friday when Federal Reserve Chair Jerome Powell (pictured) criticized the tariffs, with Trump using them to try and force an interest rate cut
Trump’s press secretary Karoline Leavitt said: ‘To anyone on Wall Street this morning, I would say trust in President Trump’
When markets closed in New York at 4pm, the S&P 500 was down 5.97 percent. The Nasdaq plummeted 5.82 percent and The Dow Jones 5.5 percent.
That follows Thursday’s losses for the three major US indices, which ranged between 4 percent and 6 percent. The S&P 500 had its worst since March 2020, when the pandemic crashed the economy.
Friday’s selloff came after China imposed fresh tariffs on all US goods overnight, retaliating against President Trump’s sweeping levies announced Wednesday and further escalating a global trade war.
Despite the carnage, panicking Americans checking their 401(K)s, IRAs and trading apps were advised to sit tight for now and not panic sell. They should speak to the experts managing their investments and seek out a financial advisor if they do not have one.
Some experts say it will be short term pain and stocks will recover. Shark Tank’s Kevin O’Leary thinks Trump has a solid plan.
So far there have been few, if any, winners in financial markets from the trade war. Stocks for all but 12 of the 500 companies that make up the S&P 500 index fell Friday.
Oil prices fell as much as 8 percent, a sign that investors believe shipping between America and the rest of the world will soon shut down.
Even gold, a traditional safe haven that recently hit record highs, pulled lower.
The Dow Jones plunged by as much as 2,100 points Friday before slightly recovering
Stock traders saw a historic drop in prices Thurday and Friday
‘The world has changed, and the economic conditions have changed,’ said Rick Rieder, chief investment officer of global fixed income at BlackRock.
The central question looking ahead is: Will the trade war cause a global recession? If it does, stock prices will likely come down even more than they have already. The S&P 500 is down 17.4 percent from its record set in February.
The tariffs have sent shockwaves through global financial markets, raising fears of a worldwide economic downturn and sharp price hikes across sectors in the world’s biggest consumer market.
‘The Trump administration may be playing a game of chicken with trading partners, but market participants aren’t willing to wait around for the results,’ Michael Arone, investment expert at State Street Global Advisors said.
‘Investors are selling first and asking questions later.’
Trump’s ‘baseline’ 10 percent tariff on goods imported from around the world came into effect late last night.
Many other countries will see their tariff rates increase above that on April 9 – including the EU at 20 percent and China at 34 percent. A 25 percent tariff imposed on all foreign cars imported into the US came into effect on Thursday.
China’s finance ministry said it would impose a matching 34 percent tariff on all US goods from April 10.
The tariffs have sent shockwaves through global financial markets, raising fears of a worldwide economic downturn and sharp price hikes across sectors in the world’s biggest consumer market.
One bright spot Friday was a surprisingly strong jobs report. The US added 228,000 jobs last month.
