Part 6/10:
Central to the uncertainty is whether Trump will hold firm on these aggressive numbers or if he's merely using them as leverage to secure a better deal. If he does intend to negotiate these numbers down, the outlook could improve significantly. Conversely, if he remains rigid, it will likely lead to painful economic fallout.
Liquidity Retraction and Government Spending
The landscape becomes murkier when considering liquidity retraction spurred by various factors, including reduced government expenditures. Historically, such reductions have led to adverse market consequences if not offset appropriately. However, one potential solution lies in the Federal Reserve's ability to cut interest rates.