President Donald Trump‘s economic transition plan has been the center of discussion since he assumed office.
Economist Craig Shapiro in his latest analysis has issued a stark warning that Trump s approach could trigger a 30-50% collapse in stocks and home prices, leading to severe economic turmoil.
What Happened: Sapiro, who is a macro strategist at the Bear Traps Report, criticized Trump s economic transition plan, which aims to move the country away from public deficit-driven growth toward a private sector-led expansion.
This transition was described as the “detox period,” by Treasury Secretary Scott Bessent last week on Friday, where he warned that the U.S. economy is overly dependent on government spending.
While this so-called “detox period,” is intended to reduce government spending and boost long-term economic health, Shapiro believes the process will be too abrupt, leading to devastating short-term consequences.
Shapiro broke down the administration’s economic transition in two phases and said, "The wealth destruction that is coming from this selling during Trump s Phase 1 of his transition plan… is going to come too quick and be too painful before we get the benefits from Phase 2.”
He added that this could lead to 30-50% correction in stocks and home prices, while the administration is “on the path to get there.”
Phase 2, as described by Trump s economic advisors, would focus on tax cuts, deregulation, and infrastructure investment.
However, Shapiro warns that markets may not survive long enough to feel the benefits, especially given Trump s limited control over Congress and the Federal Reserve s reluctance to ease monetary policy.
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