Donald Trump is engaging in a “subtle and persistent conflict” with the Federal Reserve—not through outright confrontation, but by redefining the core principles of U.S. macroeconomic strategy, as noted by Nigel Green.
Green, the CEO of a financial advisory organization, commented that while headlines are dominated by Trump’s tariffs and trade disputes, two critical strategies remain largely ignored: stablecoins and low oil prices.
“These are the twin instruments of Trump’s macroeconomic approach: dominance in digital currency and suppression of physical prices,” states Green.
Stablecoins as instruments of monetary influence
Green identifies the emergence of yield-generating stablecoins—digital dollar assets that accrue interest through tokenized Treasury bills—as a key component of Trump’s economic strategy for a potential second term.
These stablecoins do more than simply track the value of the U.S. dollar; they foster new demand for the currency by providing returns to a diverse array of holders, including individual investors, decentralized finance platforms, and institutional entities.
“This represents a major shift,” Green elaborates. “It enables everyone—from retail users to global investors and DeFi platforms—to hold a dollar-denominated asset that can earn interest, usually in a smooth and automatic manner.”
According to Green, this strategy achieves three key objectives:
- Increasing demand for U.S. Treasuries, thereby bolstering the U.S. debt market as deficits rise.
- Lowering interest rates, a long-standing goal of Trump’s, by promoting yield through market-driven mechanisms rather than relying on Fed actions.
- Reinforcing the dollar’s status as the digital reserve currency of the future.
Oil as a tool for controlling inflation
While stablecoins represent a digital dimension, oil continues to be Trump’s most recognizable economic instrument.
Green contends that Trump perceives inexpensive oil not only as a means of economic stimulation but also as a tool for controlling inflation. By advocating for lower prices through enhanced domestic production, diplomatic efforts, and market sway, Trump aims to keep operational costs manageable and minimize the need for intervention by the central bank.
“Lower oil prices drive everything,” Green asserts. “It’s a robust form of inflation control.”
Circumventing the Fed
By influencing both demand (digital yield) and supply (energy prices), Trump is crafting an alternative framework for macroeconomic management, one that bypasses the conventional instruments of the Federal Reserve.
“He’s not removing Jay Powell,” Green concludes. “He’s establishing a parallel system. It’s remarkably consistent.”
As the 2024 election season heats up, these strategies may provide insight into how Trump could transform U.S. monetary policy without altering the leadership of the Federal Reserve.