SPY Finally finished my thesis.
Trump’s Next Big Battle After Tariffs: His Congress
Trump’s next major fight after implementing tariffs will be with Congress. In earlier predictions, I stated that his immigration policies would have unfavorable consequences influencing economic decisions. Congress now finds itself at a crossroads on bills crucial to the administration’s agenda, such as the SAVE Act and the federal budget. Republicans and Democrats have unexpectedly united to block these bills, fearing electoral losses in 2026. Given this resistance, the administration is likely to face heavy hardship in fulfilling promises on economic growth and border security. This will likely provoke Trump into escalating tensions with the courts as well. Over the next few months, I expect an intensifying clash between Trump and Congress, as lawmakers attempt to rein him in amid growing economic instability. Congress, not Trump, may ultimately become the stabilizing force that determines whether the markets bottom out.
I previously said that Trump’s tariffs would drive markets lower and increase the cost of goods. Although we haven’t fully felt the effects yet, disruptions to supply chains loom and when they arrive, the economy could worsen beyond 2020 levels. Before completing this major move lower, markets will likely experience prolonged consolidation at these depressed prices. SPY is projected to form a lower high near the 570s before plunging toward the 450s. FOMC will be a part of the catalyst move down as job numbers won’t be affected until supply chains slow down. We can expect no rate cut in May.
Recent news suggests Trump may ease or eliminate some tariffs entirely, but this hasn’t stabilized bond markets, bonds remain volatile, suggesting underlying weakness. Moreover, key trade partners like Japan, China, and the EU have rejected new deals with the U.S., reflecting growing isolation. In aiding this environment, Trump is inadvertently advancing China’s long-term goal: isolating the U.S. and encouraging global divestment from American markets. With this goal in mind, it’s likely China will prolong any talks of a deal for a while and if they do talk, the deal will be unfavorable to Trump. My next trade plan is to short at the top of this range, positioning for the next significant move downward once a lower high is formed.
This is just my predictions and is set to change like my last one made. Let me know your thoughts.
