The Fiscal Dominance Trap, an Upcoming Tailwind for Risk Assets late 2025 into 2026

Tariffs to Debt Ceiling then Tax and Deregulation Policy Legs to eventual QE

This Substack post is probably one of my most important articles this year—it is quite counter-intuitive what I’m forecasting but I’ll be positioning for it.

Recap

✅ Bitcoin and gold hits new weekly all time highs—this means the macro thesis I have is being confirmed so far on price action

Substack May 18th post

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New 52-Week Highs vs New 52-Week Lows

• NYSE New 52-Week Highs: 48 vs New 52-Week Lows: 47

• Nasdaq New 52-Week Highs: 77 vs New 52-Week Lows: 110

New Highs - New Lows

The indices fall briefly below the MA10 line

% Above 50MA

Notice indices make new highs

% Above 200MA

Is a retest of April lows coming up again when debt ceiling talks are in play

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*This my personal blog and is not investment advice—I am not a financial advisor but a random person on the internet who does not have a license in finance or securities. This is my personal Substack which consists of opinions and/or general information. I may or may not have positions in any of the stocks mentioned. Don’t listen to anyone online without evaluating and understanding the risks involved and understand that you are responsible for making your own investment decisions.

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Posts of Interest

Trump’s Tariff Strategy: Same Playbook, Different Cycle

Donald Trump has been remarkably consistent for over four decades on one core economic principle: bringing manufacturing back to the U.S. His rhetoric on this dates back to the 1980s, when he openly criticized U.S. trade policy and foreign competitors for "ripping us off."

• 1987: Trump famously took out a full-page ad in major newspapers (e.g., The New York Times) titled "There's nothing wrong with America that a little backbone can't cure." In it, he criticized U.S. foreign and trade policy, accusing Japan and other allies of exploiting the U.S.

• 1988 interviews (e.g., Oprah): He talked about how the U.S. was being taken advantage of economically and said that if he ever ran for president, it would be to fix trade.

• Throughout the 1990s and 2000s, he continued to voice similar themes in books like The America We Deserve and interviews.

• As a presidential candidate in 2016, his platform was heavily centered on reviving U.S. manufacturing, imposing tariffs, and withdrawing from trade deals like TPP.

Fast forward to 2025, and little has changed in his messaging. The tariffs we’re seeing today are not a tactical bluff or short-term negotiating tool—they are deeply rooted in Trump’s long-held protectionist worldview.

This is important context for investors trying to parse whether current trade tensions will soon fade or become a structural part of the economic landscape.

The reality is: these tariffs are here to stay.

Do you think the market has priced this in? I don’t think so. That’s why as we heads towards July uncertainty and volatility came come roaring right back.

The market likes to constantly lean optimistic as the market is still pricing as if we’ll return to pre-2023 globalization norms. The market needs to start pricing in a new baseline of fragmented global trade and structurally higher import costs with lower growth—stagflation.

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Forecast

The Fiscal Pivot: Supply-Side Over Spending Cuts

Republicans attempted to cut spending early in the term, but the effort fizzled. DOGE has thus far failed to produce meaningful restraint. That’s left the administration with few tools, and fewer allies, especially as the Federal Reserve shows no appetite to accommodate via easier policy in the short term.

With monetary support absent, the focus is now shifting toward supply-side fiscal stimulus, particularly through permanent Trump-era tax cuts and deregulation. This "tax leg" of the policy stool, once tariffs are fully priced in, is likely where Bessent will shift his attention next.

Expect volatility but with volatility comes opportunity for those watching the sequencing carefully.

July Debt Ceiling