What Might Be Happening
Trump’s Strategy: Negotiating aggressively, aiming to boost U.S. tariff revenue from $50B to $200B while keeping markets stable.
Short Window (2-3 Months): Must act before hiring and business investments slow due to uncertainty.
Economic Goals: Reduce budget deficit to 2%, shift from government-driven growth to a private-based economy.
Inflation Control: Use tariffs, economic uncertainty, and monetary tools to lower the 10-year Treasury yield, enabling the refinancing of 30% of U.S. Treasuries.
Growth Strategy: Once inflation eases, cut income and corporate taxes to stimulate growth while keeping gas prices low through geopolitical moves.
Market Reaction:
Down 10-14% with first signs of panic on Monday (3.10.2025).
Expecting a V-shaped recovery unless uncertainty on Tariffs lingers, which could lead to a deeper correction before recovery.
Since there was no pre-dip euphoria (except in Mag 7 stocks, few other stocks), a V-shaped recovery is more likely—but tariff uncertainty remains a key factor.
What I am doing:
Buying selectively while expecting another 10% decline in 2-6 weeks.
Avoiding consumer stocks and fintech due to slowdown concerns.
If tariff uncertainty extends into July, markets may price in a recession leading to 3rd leg down of 10%.
May keep 5-10% cash to buy deeply discounted consumer and fintech stocks in case of a third leg down.
Uday Reddy 