Jihoz.ron 🍚 (@Jihoz_Axie): One of the hard problems the Trump admin will have to navigate:

One of the hard problems the Trump admin will have to navigate: • @elonmusk @VivekGRamaswamy via DOGE want to trim Federal deficit and reduce the amount of treasuries that need to be sold each year to fund the government. -> This would increase the exchange rate of the dollar. Low deficit, strong dollar. HOWEVER • Trump also wants to revitalize American manufacturing and industry + reduce imports of foreign goods. This strategy actually is hurt by a strong dollar. Strong dollar means that US good will be relatively expensive on the global market. Some strategies they can use to counterbalance this: • Reduce taxes significantly on companies, with special bonuses for those that are contributing to a balanced American trade deficit (IE incentives on exports to make up for strong dollar). • Encourage + pressure the Federal reserve to cut interest rates more quickly. This will make it easier for people to borrow dollars, increasing the supply and preventing the exchange rate from increasing dramatically. A strong dollar policy sounds good in theory, but actually will hurt some of the administrations stated goals without clear plans for counteracting some of the second order effects. CC: @realDonaldTrump @CatoInstitute