To The Moon

President Trump dropped another bombshell on Friday, telling reporters that a decision on the next Federal Reserve Chair will be made “very soon.” But what really caught the market’s attention was his not-so-subtle jab at Jerome Powell’s rate policy and his insistence that a “good Fed chair” would be one who lowers interest rates.

Cue the market speculation machine.

Traders are now asking: 🔹 Will the Fed turn dovish under Trump 2.0? 🔹 Is this the start of the rate-cut cycle everyone’s been hoping (or fearing) for? 🔹 Will a Trump-aligned Fed Chair turbocharge the bull market—or inject chaos into the system?

Let’s unpack what’s happening, what I expect, and how I’m positioning in this high-stakes environment.

🧠 Trump vs. Powell: A Long History of Tension

Trump’s discomfort with Powell isn’t new. Back in his first term, Trump regularly criticized Powell for being “too slow” to cut rates. He even explored whether he could fire him. Now, with a potential second term, Trump appears eager to reshape the Fed with someone more in line with his pro-growth, low-rate stance.

This raises two immediate questions:

1. Will Trump’s next Fed chair pick be overtly dovish?

2. Will that signal lower rates—even if inflation is still hovering near 3%?

My take? Yes to both. Trump sees the stock market as a real-time report card. He knows that rate cuts can juice markets and consumer sentiment. If he installs a “shadow Fed chair” aligned with his views, I’d expect at least one symbolic rate cut before year-end, especially if inflation continues to decelerate.

📈 What This Means for the Market

At face value, a dovish pivot would be bullish for risk assets:

• Equities: A rate-cut signal could supercharge the S&P 500 and Nasdaq, which already hit record highs on breakout optimism.

• Growth stocks and tech: Lower rates improve future cash flow valuations—think NVDA, MSFT, and AAPL.

• Gold and crypto: These alternative assets may rally on expectations of dollar debasement.

• Bonds: Treasuries would likely rally, with yields falling further if rate cuts look credible.

But here's the twist:

Markets love rate cuts—but hate losing trust in the Fed’s independence.

If the Fed starts looking like a political puppet, longer-term volatility may rise. Institutional investors don’t want a central bank that flip-flops based on campaign speeches. If credibility weakens, we may see higher inflation expectations and a flattening yield curve—not exactly a soft landing scenario.

💡 Trading Opportunities I’m Watching

Whether you're a bull or a skeptic, this potential shift creates some compelling trading setups:

🟢 Bullish: Nasdaq-100 Bull Call Spread ($Invesco QQQ(QQQ)$)

• Buy July 18 QQQ $560 Call

• Sell July 18 QQQ $570 Call

• Risk: Premium paid

• Max Gain: $10 less premium paid

• Thesis: If markets price in a July or September cut, tech will fly. This spread gives you upside with defined risk.

🛡 Neutral-to-Bearish: $Cboe Volatility Index(VIX)$ Call Spreads for Volatility Spike

• Buy VIX July $14 Call

• Sell VIX July $18 Call

• Risk: Premium paid

• Max Gain: $4 less premium paid

• Thesis: If the Fed’s credibility is called into question or CPI runs hot, volatility could spike. Cheap hedge.

🧭 Macro Hedge: Long $SPDR Gold Shares(GLD)$ or Gold Futures

• Gold loves rate cuts and weak-dollar narratives.

• If markets sniff political pressure on the Fed, gold could break above $3,500/oz.

• Consider using staggered GLD call spreads out to August.

🎯 My Stance: Tactical Bullish, Strategic Caution

Short term, I’m leaning bullish on equities—especially large-cap growth—as rate cut pricing grows. But I’m layering in hedges because the long-term implications of Fed politicization could be messy. We’ve seen this movie in emerging markets—and it doesn’t always end well.

That said, we’re traders, not philosophers. When the market gives us opportunity, we trade it—with eyes wide open.

As always, DYODD and risk management > prediction. Trade smart, stay adaptable, and don’t let emotions chase candles.