- President Donald Trump boasted regularly About the performance of the stock market during his first term in his position, but he recently dismantled concerns about his introductory threats about it. However, BOFA Credit Strategy says that recent developments indicate that the Federal administration and reserves are ready to respond if stock prices decrease.
It seems that the sale of the stock market earlier this month has spoiled investors from the concept that President Donald Trump will interfere to support stock prices if his policies disturbed his markets. However, the American Strategists Bank says that the so -called “Trump's situation”, a play on the terminology of options, is still alive and after reports that the administration is largely narrowed by a set of definitions announced on April 2, which the President referred to as “Liberation Day”.
Trump regularly boasted about the performance of the market during his first term. The shares initially increased after winning the elections amid the enthusiasm, whose administration will focus on business -friendly priorities such as renewable tax cuts and the abolition of restrictions, instead of the aspects of his agenda, which are less attractive to investors. However, Treasury Secretary, Scott Beesint, rejected this idea as the president's threats to tariffs, as Trump himself refused to exclude the recession.
“There is no situation” He said CNBC Earlier this month. “Trump's invitation to the upward direction is, if we have good policies, the markets will rise.”
The purchase of a “position” option contract gives the investor the right to sell basic safety at a predetermined price, known as the strike price, and therefore, it can be used as a tool to hedge against negative risks. At the same time, just buying a summons option, or the right to buy the original at the price of the strike, is a bullish bet on increasing the value of safety.
In order to be clear, the idea of ”Trump's” indicates a general commitment to the president to intervene if stock prices decrease significantly, not any mechanical trading procedure.
The White House did not respond immediately luckRequest to comment.
Federal Reserve Assets
More than two decades ago, market observers and journalists formulated a similar phrase indicating the federal reserve and Alan Greenban, who served as the head of the Central Bank from 1987 to 2006. At the beginning of his term, the Federal Reserve rates were shortly reduced after the “Black Monday” crashes in October 1987, which raised concerns about the credit borders. The idea of the so -called “Greenspan mode“Similar to similar episodes in 1998 and January 2001.
The Bank of America's strategy, Yuri Seleger, and Jean Tigo Humu, believes the Central Bank of America, is still soothing to enter if the shares decrease. While the Federal Reserve kept the fixed rates at its meeting in March, statement From the Federal Open Market Committee, she said that it was closely monitoring “uncertainty about economic expectations”, with policy makers remaining Pencilt in Two interest rate discounts in 2025.
“The sale of the recent markets has come close to the strike prices for the Federal Reserve and Trump,” he wrote. Note Monday.
The memorandum claimed that the relatively suspension of the committee shows that the central bank is particularly proportional to concerns about slowing growth, although the remaining inflation is 2 % higher than the FBI's goal.
Meanwhile, Seleger Wahham said that recent developments in American commercial policy confirm that Trump has also been developed. A relatively quiet week for tariff ads, reports from Wall Street Magazine and Bloomberg During the weekend, it claimed that the administration was considering narrowing the scope of the so -called “mutual definitions” revealed on April 2, which initially ordered the economic officials to design almost every American trading partner.
The markets got a batch of news early this week, but the S&P 500 fell more than 1 % on Wednesday Trump advertisement From 25 % tariffs on imported vehicles and car parts.
This story was originally shown on Fortune.com
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