President Donald Trump shared a video on social media Friday indicating that he’s playing chess rather than checkers with his tariff policy, given one result has been that interest rates have dropped.
Trump reposted the video on Truth Social, which another user originally created for TikTok, showing that he’s not particularly upset about the stock market taking a major nosedive over the last two days since he announced his new tariff policy.
The president said that he would be charging countries essentially half what his administration calculates, on average, they are imposing on the United States.
Further, there will be a 10 percent baseline across the board.
According to the video Trump reposted, he is “crashing the stock market by 20 percent this month, but he’s doing it on purpose.”
“Why is he doing this? To push cash into Treasuries, which forces the Fed to slash interest rates in May, and those lower rates give the Fed the ability to refinance trillions of debt very inexpensively. It also weakens the dollar and drops mortgage rates,” the narrator of the video said.
Lower interest rates for the consumer mean credit card payments fall and mortgage payments do too, which all puts money in the pockets of Americans.
Many have noted on social media — including venture capitalist and co-host of the “All-In Podcast” Chamath Palihapitiya, a Trump supporter — that the yield for 10-year Treasury bonds dropped to under 4 percent after the president’s Wednesday tariff announcement.
The reason is that when investors flee from stocks, they tend to go to Treasury bonds as a safe haven. When many people want to buy bonds, the yield goes down because it becomes a seller’s market. Buyers are willing to take less yield in exchange for higher security.
The video Trump shared above stated that one benefit from this trend will be tens of billions in savings to the federal Treasury in interest payments.
The total interest payment on the nation’s over $35 trillion in national debt last year was $881 billion, surpassing the total defense budget.
Finance expert Tanvi Ratna argued on X that what Trump is engaging in is a “full spectrum reset.”
“Start with the debt: $9.2T must be refinanced in 2025. If rolled into 10-yr bonds, every 1 basis point drop in rates saves approx $1B/year; so a 0.5% drop would save $500B over a decade. Lower yields free up fiscal room—without them, core spending gets crowded out,” she wrote.
One basis point is 0.01% (1/100 of a percent) or 0.0001 in decimal form. Here is the further breakdown of her calculations.
Delusions of Adequacy 