Trump’s Tariff Dividend Sparks Bull-Run Speculation: $2 Trillion Ready to Hit Markets

CN
3 hours ago

President Trump’s recent announcement of a dividend, which would be delivered to most U.S. citizens, is spreading chaos among financial analysts, who are in full speculation mode regarding the effects of this development on financial markets.

The dividend, which will be of at least $2,000, according to Trump’s post on Truth Social, will be paid to almost all Americans, not including “high-income people.” This stimulus would be paid with part of the “trillions of dollars” the country is receiving from Trump’s tariff policy.

According to The Kobeissi Letter, taking into consideration Trump’s latest stimulus round, 220 million U.S. adults would be receiving these payments, estimating that the total disbursement could reach $440 billion.

It also stated that while these stimuli have traditionally boosted spending, with liquidity that can pour into capital markets, it can also lead to high inflationary periods, a battle that the Federal Reserve has not yet won.

Nic Puckrin, co-founder and CEO of Coin Bureau, qualified this development as a 4D macro play. Puckrin assessed that, if tariffs are struck down by courts, it could even double the effect of this measure, injecting $2 trillion of new liquidity into the system.

“Cheaper imports ease inflation, and suddenly the Fed has cover to start cutting rates. If this plays out, everyone’s bags get heavier,” he concluded.

The injection of billions in liquidity to the U.S. economy might spark a bull run, taking markets even higher than they are. Nonetheless, there are worries about the long-term scenarios, when the U.S is running huge deficits with a growing debt of over $38 trillion.

The dividend, if finally paid, would also mess with the Federal Reserve policies, which would have to act in consequence to prevent an inflationary escalation, while still waging a battle to take inflation to its 2% goal.

While most agree that new liquidity could help markets climb even higher, the secondary effects of such a dividend on Main Street could be disastrous. Ironically, some predict that the “high-income people” not receiving the dividend could be reaping the better rewards because of the rise of stock and crypto markets.

  • What recent announcement did President Trump make regarding U.S. citizens?
    Trump announced a proposed dividend of at least $2,000 for nearly all Americans, funded by revenues from his tariff policies.

  • How much total disbursement is expected from this dividend proposal?
    Estimates suggest that 220 million U.S. adults could receive these payments, potentially totaling around $440 billion.

  • What are the potential impacts of this dividend on the economy and markets?
    While the liquidity could drive a bull run in financial markets, there are concerns about high inflation and long-term economic deficits as the U.S. debt surpasses $38 trillion.

  • How might this dividend affect Federal Reserve policies?
    The dividend could complicate the Fed’s efforts to control inflation, making it necessary for them to adjust existing policies while aiming to meet their 2% inflation target.

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