Trump to Wall Street: Brace for Impact (Peter Coy, 03.11.25, Free Press)
[S]tock prices have fallen at least in part because investors are coming to the painful realization that Trump doesn’t seem to care so much for them anymore. In his first term, Trump viewed the market as his personal scorecard. Now? “You can’t really watch the stock market,” he told Maria Bartiromo on Sunday.
With the market nearing correction territory—defined as a 10 percent drop—since its mid-February peak, I asked Mohamed El-Erian, the bond whiz who is now president of Queens’ College, University of Cambridge, whether this realization was part of the reason stocks had fallen over the past month. He agreed. The steadfast belief that Trump would do whatever it took to keep the stock market happy was termed “the Trump put.” (A put is a derivative that protects its owner from price declines.)
Confidence in the Trump put began to erode when Trump and his economic team started talking about bond yields, rather than stock prices, as their metric of choice, El-Erian said. (Bonds can do well even if stocks are doing poorly.)
Even before this past weekend, the market had been falling, partly thanks to the specter of high tariffs. But then, over the weekend, Trump and others on his team seemed to say that even a recession would not cause the administration to pull back from its tariff strategy.
And because the tariffs could lead not only to slower economic growth but also higher inflation—stagflation, it’s called—investors can’t count on the Federal Reserve to bail them out as it has in the past, El-Erian told me. (That’s called “the Fed put” on Wall Street.) The Fed will hardly be eager to cut interest rates aggressively if tariffs are pushing up prices, he said.
Stocks rose after Trump was elected because investors were looking forward to deregulation and tax cuts. Yes, they assumed that Trump might use the threat of tariffs to gain concessions from trading partners. But he surely wouldn’t be so foolish as to erect high and long-lasting tariff walls. Instead, El-Erian said, “The things that the market really likes haven’t come yet,” and the thing the market doesn’t like—tariffs—are turning out to be more than just tactical threats.
Destroying the economy makes America less attractive to immigrants. The nihilism is intentional.