Analysis: Trump's refusal to drop the fiscal deficit runs counter to the goals, and the current fiscal path is inevitably leading to bankruptcy.

BlockBeats news, on July 1, the trading information platform Kobeissi Letter pointed out that the irony of the situation between Elon Musk and Trump is that eliminating the U.S. fiscal deficit could actually achieve all of President Trump’s economic goals at once. First, eliminating deficit spending would reduce the volume of treasury issuance, thereby dropping treasury yields. This would also lower the inflation rate, allowing the Federal Reserve to cut interest rates and calm the fluctuations in the bond market. In fact, the bond market was precisely the reason the trade war turned in April when the 10-year treasury yield soared above 4.60%. To some extent, reducing deficit spending would enable Trump to impose more tariff pressure to narrow the trade deficit. Although the trade war is seen as ‘short-term pain for long-term gain’, the true applicable scenario for this phrase is cutting deficit spending. As Musk continues to make public statements about the debt crisis, more and more Americans are beginning to follow this issue. Since the stimulus measures during the pandemic in 2020 began, bankruptcy has become the inevitable outcome on the current fiscal path in the U.S.