To mark the first 100 days of Trump 2.0, investment platform Saxo interviewed former White House comms director Anthony Scaramucci and former congressman Adam Kinzinger about the last three months.
Can Jerome Powell and the Federal Reserve calm the markets?
Adam Kinzinger: Yes, I think they can. I think the biggest thing is that Jerome Powell has the ability to calm the markets. The question is, does Donald Trump keep attacking Powell when he doesn’t like what he does, or does he finally let Powell continue to operate independently? I think that’s going to be the lynch pin to the markets. Recently, they’ve [Trump’s administration] signalled that they’re going to lay off Powell again, and that does a lot to calm markets. So, I think that’s the real question there and we’ll see what happens.
If U.S. tariffs take effect once again, which economies will be the most impacted? Will the U.S. take the brunt of the damage, or will Europe and China be the bigger losers?
Anthony Scaramucci: Unfortunately for the world, there’s no decoupling. We learned this in the global financial crisis. We’ve learned this in other recessions. If the US is going into a recession, it’s going to pull the rest of the world down into a recession.
What I find interesting about the capital markets is that the FTSE and the DAX, on a relative basis, are doing better than the US market since the trade war started. So that means that long-term international capital allocators are saying, “Whoa, I can’t trust the US like I used to.”
Germany is saying that it’s going to borrow money to rearm itself. That means that their industries are going to be doing better. There’ll be more profitability. The UK is saying that they have to get a little bit more muscular on defence and other things.
And so I think on the margin, some of the larger European industrial nations will do better because of what Trump is doing to the capital markets in the US. He’s making them more capricious. He’s making them more unpredictable as a result of his policy. But I think that everyone’s going to get hurt.
Has Trump gone mad with market power?
Adam Kinzinger: As Spider-Man’s uncle said, with great power comes great responsibility, and I think Donald Trump truly, and I mean it, he got his economic policy in 1985.
If you think of the United States in the 80s, the United States had the Ford Motor Company, which was struggling and then Japan had their car makers which were doing very well as they were coming up in the 80s. And so the obsession in the mid-’80s was with the idea of a trade deficit. The United States is not exporting cars, but we are importing a lot. That’s understandable in the context of the US auto industry being kind of the gold standard of the world.
But the reality is, as the world has progressed, as the United States and frankly the West have become first world nations that do not necessarily profit from putting screws in iPhones, the trade deficit has become less important.
So, what I think you’re seeing now, keep in mind Donald Trump’s base, I’d say about 50% to 60% of his actual base are hardcore MAGAs. He could do anything on national TV, and people wouldn’t care. But there’s a significant amount of the Republican base that voted for him because they thought he was better on the economy than Joe Biden. Maybe they’re typically Republican like I am, and they thought Biden was bad on the economy. These are the people he can lose and is losing at this moment.
Yes, the market shakes people, but the market is just an emotional tool. The reality is that the market goes down. It’s going to come up someday when people decide it’s time to come up – it’s a canary in the coal mine – but it’s a temporary thing.
It was the long-term bond yields that really scared this administration. You think about the United States of America, with the dollar being the reserve currency of the world, and the fact that we’re $36trillion in debt. The reason we can sustain that debt is that the world looks at us and says that it is a safe place to invest. Even with the debt, as long as they believe it’s a safe place to invest, we can sustain the debt. They started to not think that, and what you saw in these 10-year bond yields was an increase when it should have gone down. I think that did more to shake Donald Trump than the stock market reaction.
But to see that and recognise that the US has to refinance 8-10trillion in debt in the next few months, and now all of a sudden, you’re doing it at higher interest rates. We’re already spending more in interest on our debt than on national defence, and so, I think that was the thing that probably shook him and his allies the most.
Looking at Trump’s first 100 days back in office, what do you think is the single most dangerous policy he’s inflicted on the world so far – and what does that tell us about where this presidency is heading?
Anthony Scaramucci: So let’s be fair to him. He’s done a great job on the US border, it needed to be corralled. You needed to reduce the migration on the border for so many different economic reasons, etc. so he’s done a great job on the US border.
The most significant thing that he’s done is started a trade war which will lead to a recession and possibly a steep recession.
He’s done irreparable damage to the United States because if you’re a European leader – let’s say I was running France or the UK as a rationalist and I looked at what Trump was doing – I would be saying three things: Number one, I can’t really rely on Donald Trump as an ally anymore and there’s a chance here that he may not live up to the NATO treaty. Two, 50% of the people in the United States supported Donald Trump, so there’s something rotten in the body politics of America. So even if Trump goes away, there’s something going on in that country that I can no longer rely on as a faithful partner. And then the third thing is he’s causing incalculable damage to the global economy.
So tourism will be down in the United States, $90 billion of revenues lost for the US. Trade will be down globally. Unemployment will be up and because of tariffs and the spectre of inflation is actually going to be high. So you’re going to potentially run into a situation of stagflation and, by the way, he’s using emergency power.
So just to understand that Congress seeded to the President because they didn’t want to have the political electoral aftermath. if I am a congressional leader and I declare war, then my constituents say, ” you declared war. We’re voting out of office.” But if I seed that power to the President under emergency powers, I can go to my constituents. It’s the President. See? And so for the last 50 years, that’s what’s been going on in the country. So Trump is saying he has emergency powers to impose these tariffs.
But these cowards, they won’t stand up to them. And so, a result of what you have is a very sloppy situation and this causing irreparable damage to the reputation of the United States as evidenced by the rise in our 10-year interest rates on our Treasury Bonds and other and the weakness in the US dollar.
Just remember something though, Trump is also lying, right? He said he’s got 75 people that have come to the table. They want to trade with him. They don’t. China, as you and I are speaking, is denying trade talks with the United States. They say they’ll take a rational, professional approach, but they’ve also told people if you’re trading with us and you’re going to team up with the United States, it’s going to harm you. So, when Trump says that he’s got the cards, the other people don’t have the cards, he doesn’t have the cards.
With Musk stepping away from Trump, what do you think this means for Trump, Musk, and their respective business interests?
Adam Kinzinger: They [Tesla] recently reported earnings down 71% in the first quarter. You don’t have that in a company unless you’re in floppy disks, and they just invented the hard disk. That is not for an electric car company that makes a pretty good product. So, that is 100% related to Elon Musk and his controversy.
So, I think he truly does care, and I think he’s panicking a little bit. Frankly, this is great for America that he’s stepping out because one of the things that has angered me and most Americans is the richest man in the world – who will probably be the first trillionaire at this rate in the world ever – is the one with a chainsaw on stage telling Americans what they can live without in government.
Everything he’s cutting and the jobs he’s cutting, he probably makes in 10 seconds in interest on his own wealth, and so I think it is good that he leaves. He doesn’t understand government and the problem with these tech bros is they did some things really well, but they think that makes them experts in everything and, I’m sorry, you may be really good at inventing cars or rockets, but that doesn’t mean you understand how government works. So I think this is ultimately good for the United States that he steps away but he’ll probably be replaced with some other clown somewhere.
Do you speak with Elon Musk – you share similar interests in crypto and making money. Have you managed to get any kind of steer as to what he is thinking with Tesla and the markets tanking?
Anthony Scaramucci: So, fully disclosed I’m an investor in SpaceX. I’m an investor in X AI and X which have now merged with each other. I don’t own any Tesla but I own those two private companies.
I have not spoken to Elon directly, but I do speak to people in management in those two companies as a private investor. And I would say to you that I think that Musk I think was shocked at the reprisal to going this deep into Donald Trump’s world.
And I think he was shocked at the reprisal of the stuff that he’s done on DOGE, which I think he views as generally patriotic. And I would say to you that I’m probably not a fan of the methodology of DOGE or the process, but I am a fan of, hey, if we can find several hundred billion dollars worth of waste when we’re running these large deficits, we certainly should be trying to do that.
So I predict that Musk returns to his businesses. He keeps a good relationship with Donald Trump because they both need each other. Trump is not going to go after the richest person in the world that has a $44 billion megaphone known as X. I think that Trump will always praise him and I think Elon will slip into the background and try to figure out a way to rebuild these businesses.
And I do think that you will see X-XL whatever you want to call that conglomeration he’s going to build a super app there and I think he’s going to be using crypto. Will it be his own coin the way Telegram is doing it? Will it be stable coin? It will be something. I don’t know what it will be but it will be something.
What are you thoughts on celebrities who have become involved in politics during this campaign, such as Dana White as a political operator and the UFC as the home of MAGA. Everyone talks about Musk because he’s loud and on TV every day. But White has a similar level of influence on some level and perhaps more of Trump’s respect. What are your view on how he’s positioned himself and the UFC?
What’s the worst case scenarios that could arise from Trump’s time as president look like? How bad could things get
Adam Kinzinger: Yeah, I think it can get pretty bad. I feel like, to an extent, he’s starting to stall a little bit, which is good, but that doesn’t mean he’s stalled. It doesn’t mean there’s not going to be more crises.
This is far worse than I imagined it could be quite honestly, in terms of the brazenness and the outright disregard for norms, for institutions and everything else. The big real crisis point will be determined by what happens when the Supreme Court, which seems to be right now pretty aggressively pushing back against him, what happens when they do something he doesn’t like, and does he follow that order or does he refuse it? I think that is the lynch pin that will determine if we are in a real crisis or not.
It’s one thing to say to the Supreme Court that ‘I don’t agree’ and I think honestly that moment could come within the next few weeks.
The Trump administration’s tariffs are igniting fears of a recession. Bitcoin is seen both as a hedge against inflation and a risk asset. Which narrative will prevail in the case of a recession?
Anthony Scaramucci: So this is a really good question, and so the short answer is yes, it will prevail. And the longer answer is, we only have, I would say, we only have three or four weeks of data where all of a sudden Bitcoin, which was tied to the MAG7 and tied to the NASDAQ, boom, drops. Every time the NASDAQ went down or there was risk off, we’re finally seeing this non-correlation where it’s trading a little bit like Gold, which is outperforming, but it’s trading a little bit like gold in the last three weeks. And I think this is a direct result of the Wall Street sales machine. I think you have an enormous amount of inflows taking place in the BlackRock ETF and other ETFs.
What comes after Trump 2.0 for the Republican Party?
Adam Kinzinger: In terms of the Republican party after Trump, I don’t think anybody knows. Donald Trump is uniquely capable of shamelessness. So even if you see JD Vance, he goes and does something stupid, and he takes hits for it, right? Donald Trump has the ability to do something stupid and get away with it. So he’s uniquely powerful in that. There’s nobody who’s going to be like Trump or have the spell that Trump has. The question is: does the party wake up and go back to the party of Reagan, or does it continue this populist thing?
The answer will come when we see how badly they get crushed in 2028, where America resoundingly says we don’t want that brand. Then I think they will have to have a come-to-Jesus moment. If their answer in 2028 is that it was pretty close, I think we’ll be stuck in the cycle for a little bit.
Who do you think will be President in 2028?
Adam Kinzinger: If I had to predict, I don’t have names because I think whoever we’re talking about today will not be president. If you look back at the American tradition – with the exception of course of an incumbent’s running again – typically at this time when you’re talking about who’s going to be the candidate in three or four years, it’s never that person so how can I describe who I think the next president’s going to be.
They’ll probably be a Democrat and I would like to think and it may be a Democrat that runs unabashedly as a centrist Democrat because I think the concern I have with the Democrats right now is that they’re going to come up with the wrong idea that the answer is to run a Bernie Sanders or an AOC [Alexandria Ocasio-Cortez].
And look, America didn’t turn against the Democrats because they weren’t liberal enough. They turned against them because they were playing identity politics. And so, if you have another conservative Democrat in the mold of Bill Clinton without the interns, for instance, I think the Democratic Party will win and I think it can maintain some dominance in this country winning back blue collar voters, which they have lost, and winning back men, which they’ve lost. So I do think that if I had to describe the candidate, that’s what it would be.
