The U.S. government faces the maturity of approximately $7 trillion in Treasury bonds over the next six months, with interest rates at 4%, significantly higher than when they were issued at near-zero rates. This could explain Trump's recent moves, including public spending cuts and uncertain tariff policies, aimed at slowing the economy to push the Fed to lower interest rates.
The stock market has reacted negatively, dropping over 10% in 16 days, with the "Magnificent Seven" entering a bear market. Additionally, the Atlanta Fed report predicts a 2.8% decline in GDP, indicating a weakening of consumer demand.
In Europe, Germany has approved a massive €1 trillion spending plan, abandoning fiscal austerity, which could help the European economy become more independent from the U.S. economy. However, U.S. economic crises have always had global repercussions, so the hope is that this slowdown won’t turn into a severe recession.
