Core Viewpoint - Wall Street may create a stock market bubble to pre-fund Trump's large fiscal plan, which could stimulate nominal GDP growth but also increase inflation expectations and pressure on the bond market [1][2]. Group 1: Market Dynamics - The conflict between Trump and Powell regarding interest rate cuts is intensifying, leading to expectations that Wall Street will position itself ahead of a potential dovish shift from the Federal Reserve [2][3]. - Hartnett predicts a transition in U.S. policy from a "detox mode" characterized by high interest rates and tight fiscal policy to a "nominal GDP boom mode" by late 2025 to early 2026, which would involve rate cuts and tax reductions [2]. Group 2: Fiscal Pressures - The U.S. government spending has reached a record $7 trillion, making it difficult for Trump to achieve balance through spending cuts, as $4 trillion is mandatory spending and $1 trillion of discretionary spending has been abandoned for cuts [4]. - The only remaining option is to reduce $1 trillion in debt interest costs, with Hartnett suggesting that lowering the federal funds rate to 3.25% could stabilize debt spending [4]. Group 3: Market Signals - Hartnett identifies five elements that signify a market bubble: Valuation, Inflation, Bonds, Breadth, and Exponential price moves, with the most significant signal being stocks reaching new highs while ignoring rising inflation expectations and bond yields [5]. - The proposed trading strategies include shorting the dollar, going long on U.S. tech stocks and emerging market value stocks, and going long on gold/cryptocurrencies as a hedge against instability [6][7].