In the last essay, I told

In the last essay, I told you that under the Trump administration, inflation could be an unexpected surprise. This is the second annual outlook, and this time we’re going to take a look at the so-called “Trump Trade” that has pushed the world toward a stronger dollar / higher U.S. stock prices / higher interest rates since November.

The core of Trump’s policies is tax cuts, tariffs, and immigration restrictions. And if you add more to that, the point is that he’s going to have a bold government restructuring (feat. Musk), the Fed’s grind, the massive oil production increase. As I’ve pointed out in the last essay, tax cuts, tariffs, and immigration restrictions will eventually point to inflation. If we disable the Fed, that inflationary trend could be further strengthened. However, on the contrary, the pressure on energy prices by increasing the production of crude oil and the efficiency of fiscal spending through the government’s restructuring could act in the direction of curbing inflation. If growth is strong, but inflation is contained… It’s a Goldilocks scenario that can be very positive for the financial markets. No, I have to be honest. It’s going to be a very positive story for the financial markets in the United States.

And as Trump has already played a significant role in the first term, the financial market is full of expectations for him. And even before Trump took office, expectations are high… It’s also convincing to say, “How much will it be if I actually take office?” But… Personally, when I look at foreign news flows, I feel like the atmosphere is changing little by little over time. First of all, as I said in the last essay, the story of Trump’s oil production increase… It is not receiving much response from energy companies. I quote the article once again.

“Changes in the Characteristics of U.S. Shale Industries…” “There is a possibility of a setback in Trump’s drilling expansion plan” (Yonhap News, 24.12.28)
“Trump will jump prices on tariff bombs… Untimely hoarding craze” (Seoul Shinmun, 24.12.16)
“Trump shouts ‘drill, baby, drill’… U.S. Chevron facility investment shrinks, why?” (E-Daily, 24.12.6)
“The reason why Big Oil, which boomed during Biden, is not welcoming Trump… International oil prices are likely to fall” (Energy Economy, 24. 7. 30)

Let’s take a quick look at the immigration section. It seems to be more controversial than I thought… In allowing immigration, Musk has a strong mood to be more tolerant of foreign workers with technical skills. On the other hand, Republican hawks are a little different. They are very tough on immigration. That’s why the conflict between conservatives and Musk in the Republican Party is intensifying. Let’s check the relevant content for a moment and go.

“Trump Appoints ‘Anti-immigrant Hardliner’ Stephen Miller as Deputy Chief of Staff” (Segye Ilbo, 24.11.14)
“The beauty, high-skilled immigration… Musk vs Miller possible collision” (Herald Economy, 24.12.2)
“NYT, ‘Trump pushes for tax cuts and deregulation first… Tariffs and immigration policies are subordinated” (Tax Finance Newspaper, 24.12.23)

“Musk declares war on MAGA… “The internal strife over professional immigration”
“The internal division of U.S. President-elect Donald Trump over immigration visa policies issued to professional foreign workers in the U.S. is moving in an unusual direction.” Tesla founder Elon Musk, who is considered the “first contributor” to Trump’s election, said on the 27th, “I will go to war over this issue,” while swearing at hard-liners in immigration policy. Silicon Valley figures, who have changed their positions in support of Trump in the upcoming presidential election, seem to be engaged in a “stake fight” as they collide with their supporters who follow the hawk (Make America Great Again). As the controversy continued, Trump ruled in favor of Musk on the 28th, saying “H1-B is an excellent program.” (The Chosun Ilbo, 24. 12. 29)

Of course, I don’t know which way to conclude, but there is one thing for sure. The conflict between Musk and the Republican Party, which is called Trump’s confidence, is deeper than expected. In other words, not only on immigration, but on the other side, everything can conflict. We are well aware of the expression “red sweep.” He is Trump, who has dominated Congress… If the conflict with conservatives in the Republican Party deepens, it is likely that the Red Sweep will struggle considerably when it comes to power.

The conflict with the Republican Party has already erupted once in the budget. Trump put the brakes on the budget agreement at the end of the year by saying, “Let’s get rid of the debt limit.” But the Republican fiscal hawks… In other words, these fiscal hawks who don’t like to increase the national debt as much as possible have been held back and become embarrassed. Trump and Musk’s attempt to remove the debt limit was ruined by 38 Republican insurrection votes. At the same time, the media is saying that Trump’s leadership has been put to the test. Currently, the U.S. fiscal deficit is quite severe. Trump is discussing tax cuts at a time when the fiscal deficit is serious… If the fiscal deficit continues to be this serious and troubles continue in the debt ceiling negotiations that are just around the corner… Tax cuts, which are at the heart of Trump’s policy, could also be put on hold. Similarly, let’s take a look at the news flow.

“Yellen Returning’ Fiscal Sustainability Concerns… “I’m sorry” (Yonhap News, 24.12.11)
“Is Trump’s tax cut free? Republican lawmakers are thinking” (Korea Joongang Daily, 24.12.2)
“The U.S. House of Representatives ‘Fiscal hawk’ that is holding back tax cuts… Trump’s Republican grip has been tested (Korea Ilbo, 25.1.1)

Secretary of the Treasury Yellen said in mid-December that the debt ceiling will reach around mid-January… He’s trying to minimize the deficit, but it didn’t work out. He’s trying to say, “I’m sorry.” He’s trying to say, well… I’ve spent a lot of money since the end of 22… I even feel irresponsible, but that’s not the point right now. The debt problem is so serious…