Trump on Truth Social:”Iran’s Military is a complete and total mess. Much of it, like their Navy and Air Force, doesn’t even exist anymore – They have been completely defeated. Iran is all talk and no action. The Bully of the Middle East is DEAD!!! They’ve taken too long to negotiate a deal that would have been great for them, now they will have to pay the price!!! President DONALD J. TRUMP”
Trump is getting nervous now that the stock market is falling almost daily? Maybe someone told him that the Fed being forced to hike into a negative supply shock won’t be good for the economy nor the mid-term elections?
I’ve mentioned in the past weeks that the surge in stock prices might have given Trump a false sense of leverage. That works as long as the Fed remains neutral/dovish, but it stops doing so if the Fed turns hawkish.
The “good news” is that Trump will lose his leverage with a falling stock market which could eventually force him to reach a deal and get the Strait of Hormuz reopened. The bad news is that we don’t know what’s going to be his pain threshold, so the stock market could fall quite a bit before we get a breakthrough in negotiations.
Of course there’s another scenario where he goes berserk and restarts the war trying to force Iran to get a deal or destroy everything. The problem is that such a scenario would yield the same result: a bear market in stocks, a potential recession and a defeat at the mid-terms.
This article was written by Giuseppe Dellamotta at investinglive.com.
