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Welcome back to Problems to Profit. Today I'm going to give you the first two weeks of Donald Trump, the economic update, or at least as I'm seeing it. What do we got going? In his first day, Trump signed like 200 executive orders. He outpaced the previous administration in one day. They did less executive orders in four years than he did in one day without going through all of them, because that would be a lot and a lot longer than I want to take on your time today. The main points of the executive orders were lowering energy costs, deregulation and efficiency in government. So they want to cut unnecessary spending and they want to deregulate to spur growth. They feel that way too many regulations were put on by the previous administration. I tend to agree with that one. Cutting energy cost, I also think would be a huge win, not just for the United States, but for the entire world. It would bring lots of second and third world countries back into the market, selling where, you know, we have more access to products. It would be a major win on inflation if we can get the whole world producing in the markets. And that always happens when energy costs are lower. They want to move DEI back to meritocracy. So you are no longer, according to what these say, going to be hired based on the color of your skin. You're not going to be hired based on your gender or any other factor that you may feel gives you some, I guess, advantage. You're going to be higher only based on merit for the job, which I'm pro that as well. Then another big one, huge one, deportation. So the executive orders that came out, we're going to see a lot going on the first two weeks of Trump. I mean, we started seeing thousands of deportations already. We saw, you know, news media freaking out. I mean, he's doing what he said he was going to do. Love him or hate him, he's not failing to deliver on the promises he made on the campaign trail, at least in his first two weeks. So next thing that we're seeing tariffs weren't a lot of tariffs in the first few weeks of Trump's presidency. We're right now, you know, one day before the end of January. So it looks like we're about to see 25% tariffs on Canada and Mexico, assuming there's not some magical pivot between Shine Bomb and Trudeau, and they reach out to Trump tonight. So I don't know when you guys are gonna get this podcast. I'm assuming next week, but if you guys get this one next week, you know, by that point, we'll all be getting the news together on what exactly happened with those tariffs. So it looks like we're about to get 25% on Canada and Mexico, 10% on China. There was a threat of 25% that would move to 50% on Colombia if they didn't take the migrants. That immediately backpedaled when the Colombian government realized Trump was serious and they decided to take the migrants. They even offered to allow Trump to use the Colombian presidential plane to transport migrants, which is hilarious. So, I mean, that's a good indicator that the tariffs might be, at least in part, the leverage that Trump is promising. They will be. Especially with all the trade deficits we have. Tariffs could be much more damaging to the other economies that we trade with than they will us because, you know, there's, There's. We don't trade with them, we don't sell them as many of our goods as they sell goods to us. Meaning if there's a trade war, yes, it hurts everyone, but. But it will hurt them more. And so I think Trump might be onto something here with the leverage on these tariffs. All right. Other major factors, and these are critical because right now we have a huge stall in the real estate market, some weirdness going on in the stock market due to a Chinese hedge fund announcing that an AI called deepseek, on older, cheap Nvidia chips was able to outpace and outclass all of the AIs that American companies are spending hundreds of millions and or billions on training and developing and creating. And so you can now go download this app called Deepseek and get basically the same services that OpenAI or any of the other what was supposed to be open source AIs that weren't. And Deepseek is an open source, apparently they work the same way. So what does this mean? This means that if that is real, if that is legitimate, if Deep Seek really did, for a very small amount of money, just a few million dollars, train a competent AI to using old, outdated chips that are nowhere near as advanced as the ones we have today, then that might mean that our current artificial intelligence stocks, our current tech stocks are dramatically overvalued. So, you know, there's kind of two theories in the first two weeks of Trump. One is that, you know, this is an amazing innovation and we all need to catch up. And that might indicate that we're going to have some stock market challenges. The other is, this is a hedge fund trying to make a profit lying and saying, oh, it's not about the capability of Deep seek and it's not true. And it's all a big money hustle scam. So those kind of seem to be the two prevailing theories. The other big thing that we're seeing is the government layoffs. And this one is really big. Okay, really big. And the reason I say this is really big is we've already had questionable Bureau of Labor statistic data over the last few years of Joe Biden. And with government layoffs coming, remember, the government is always a late actor in any economic cycle. Layoffs don't start in government. They generally end in an economic cycle with government. If the government's going to come in and actually do some layoffs that will affect jobs numbers. Apparently they sent out the exact same email that Twitter sent out when Elon Musk bought Twitter with a few minor differences and offered severance till, I think September. And all you have to do to get that severance is take it. Now, even if this doesn't immediately impact the unemployment rate, because the Fed might go and say, oh well, they have, they have benefits till September. So it's not an immediate effect. It will put the Fed on notice that by September there could be millions of job losses that they will need to absorb that will affect the unemployment rate massively. And with the Fed having a dual mandate of maximum employment and stable pricing, that would be a critical indicator that they would have that they need to get ahead of it and cut rates. Additionally. The first two weeks, Trump, we had a Fed meeting and Trump and the Fed have an interesting relationship. Trump made statements that the Fed should lower interest rates, cuz he knows more about interest rates than the Fed does. And whether you agree with that or disagree with that, you know, Trump did have low inflation for four years in his presidency. He did use tariffs. Right now we have fear throughout the markets of tariffs. And it seems like he balanced things. Well, maybe he does understand stuff, maybe he doesn't. Not necessarily my place to say, but the Fed meeting that we had was, while they didn't move rates, rather dovish. Jerome Powell made multiple comments that I think are very positive for our future. I do think, I mean, he did state that there were 170,000 new jobs over the last quarter on average, every month we had 170,000 jobs. And I think he's ignoring about 50,000 layoffs that just weren't quite tagged that way in public filings and reports. Big companies sometimes do layoffs to get ahead of financial situations and boost their stock and everything else, but they're changing the names and tagging it differently. And it looks like the Fed is ignoring that in the labor data or maybe that the labor data is just not reporting it the way they should be. But while there was that questionable thing in the Fed meeting, there was also the fact that he said, look, we're looking at ways to re innovate how we underwrite our numbers. And while we're not going to change our 2% target for inflation, we are looking at real estate. And I mean, when you look at housing, the way the Fed calculates inflation on housing, which is a huge percentage of all of their metrics, there's about a 15 month lag. Whether it's owner's equivalent rent or anything else, there's about a 15 month lag. Well, if you look at the rents 15 months ago in the height of COVID when everything was going up, up, up, up, up, we're still using that data today when things are actually slightly down. Okay. Housing values have come up, but last year was a 35 year low in housing transactions. Like single family home transactions were at a 35 year low. Yes. That means lower than 2008. And the Fed, I think their big motivation right now, it seems, is to not take the blame for destroying housing, causing a recession, really anything, I think their biggest motivation, I don't think they're highly political, but I do think they really care about protecting their legacy. And the fact that they're willing to look at innovations on how they measure the data says to me they're going to be dovish. And that'll probably be bullish for us on what the inflation numbers are gonna do over the next 180 days. You compound that with what I mentioned a few minutes ago in the government layoffs, that would be a direct threat to the Federal Reserve's stable employment, okay, maximum employment mandate. And so if you see potentially hundreds of thousands or millions of layoffs from the government, you will see a very dovish Fed overnight. Am I predicting recession? Am I predicting doom and gloom? No, I'm not. I'm giving you factors that could move the needle that we should all be ready to get ahead of. What am I doing? Personally, I'm hoarding a little bit of cash and I'm waiting to see what might be a great value to buy. I'm holding off on doing too many refinances or things like that because it is highly likely that on March 19, the next Fed rate, we might get some good news. It is also highly likely that over the next 60, 90 days we might see how inflationary the tariffs aren't and you'll see the arbitrage on the mortgage, the long term monies coming down, which will improve rates. Remember, before the Fed even made a cut back in September, you were at about a 5 and a half percent par rate at its lowest, which means with 100 basis points of cuts, they could potentially get right back there. You have great economists like Barry Habib and others predicting that we're going to be in the high fives, mid fives by the end of this year. And based on what I'm seeing, I think they're probably accurate. All right, guys, well, this is your first two weeks of Trump. I look forward to hopefully doing an economic update for you next month as well. We'll see what the next few weeks of Trump looks like and we'll be reporting it to you next month. Y'all have an amazing day on purpose and hit the show Notes. Go out there, check out my courses. I hope you like it. As always, you don't have to buy them if you guys can't afford the courses that I sell. They're like I think 100 or 200 bucks are super cheap and they will help you in your business. But if you can't afford them for any reason, guys, all you have to do, send any of my content that has helped you to someone you think it would help. Screenshot that, send it to us. We'll give you the courses for free. There always needs to be an exchange. It doesn't always have to be money. I want to see you guys blessed and benefited. I hope you all have an amazing day on purpose. Thanks for tuning in.