The biggest macro trends in the coming years:

Just saw a passage, as shown in the image below. It feels resonant. It might be a straightforward explanation of the macro landscape in the coming years. Interpret it as you will. This article does not constitute investment advice.

This passage is from a Chinese financial analysis or commentary article, focusing on the views of Michael Hartnett, Chief Investment Strategist at Bank of America, on the U.S. stock market and macroeconomy. The core content can be broken down into the following layers:

Overall View: Hartnett believes the U.S. stock market is currently in a strong phase, and investors should "go all in" until the bond market crashes. This is a short-term optimistic but long-term cautious strategy, suggesting the stock market bubble may persist for a while but will burst eventually due to soaring bond yields or a debt crisis.

Shift in Market Logic: The article points out that the core logic of the market has fundamentally changed. From the perspective of the Trump administration's policies, U.S. fiscal policy is shifting from "detox" (austerity mode, referring to spending limits and deficit control) to "gorge" (a gold-rush mode, referring to unrestrained large-scale spending and stimulus). Here, "detox" may metaphorically refer to the previous administration's (e.g., Biden era) fiscal constraints (e.g., inflation control acts), while "gorge" symbolizes Trump-style expansionary policies like tax cuts and infrastructure investment, leading to debt inflation but stimulating economic growth.

Policy Impact and Bubble Mechanism: This shift will address the massive debt problem by creating a "big beautiful bubble." Specifically, large-scale spending will drive up prices of risk assets like stocks and cryptocurrencies, forming an asset bubble that indirectly "pays for" the debt (through economic growth and increased tax revenue). However, this feast will only end when the bond market crashes sharply (yields spike, causing borrowing costs to surge).

Implied Risks: The article emphasizes that the stock and crypto markets have already received this signal (policy stimulus), but the bond market crash will be the terminator. This reflects Hartnett's consistent "bubble theory" perspective: short-term benefits from loose policies but medium-to-long-term adjustment risks.

Overall, this passage uses metaphors (detox vs. gorge) to interpret the potential impact of Trump's policies on the market—optimistic about short-term stock gains but warning of the unsustainability of debt-driven bubbles. The language is vivid and cautionary, likely aimed at explaining U.S. market dynamics to Chinese investors.

Evidence Based on Current U.S. Government (Trump's Second Term) Bills/Actions

As of July 19, 2025, the current U.S. administration is Trump's second term (inaugurated on January 20, 2025). The Trump administration has passed multiple executive orders and legislative actions to promote fiscal expansion, focusing on tax reform, spending stimulus, and debt management. These actions partly validate Hartnett's view: policies have indeed shifting from relative austerity to expansion, increasing stock market bubble risks, though the government claims to control deficits through growth. Below is an analysis of key bills/actions:

Tax Reform and Spending Stimulus (Shift to "Gorge" Mode): The Trump administration quickly pushed the "One Big Beautiful Bill," a comprehensive tax reform and spending package that prevented $4.5 trillion in tax hikes and lowered rates, allowing average workers to keep $4,000–$7,200 more in income. It also increased child tax credits, provided $1,000 tax-deferred investment accounts for newborns (2025–2028), and included adjustments to Social Security and Medicaid. This directly reflects unrestrained spending: the tax reform is projected to reduce federal tax revenue by $4.5 trillion from 2025–2034, stimulating consumption and investment but amplifying debt pressure.
This aligns with the "gorge" metaphor—stimulating economic growth through lavish spending, forming asset bubbles (e.g., stock market rises) to indirectly address debt, rather than strict austerity.

Debt and Deficit Management (The Logic of Bubbles "Paying for" Debt): Federal spending in FY2025 reached $5.35 trillion, with debt maintenance costs accounting for 17% of total spending ($921 billion). Total debt is projected to rise to $52.1 trillion by 2035 (118% of GDP). Trump's plan claims this bill will reduce the debt-to-GDP ratio to 94% by 2034 and halve the deficit by 2034, but actual actions include over 170 executive orders (e.g., extending hiring freezes, revoking certain spending) alongside massive tax cuts.
This validates Hartnett's "big beautiful bubble": tax cuts and spending drive growth (projected long-term GDP growth of 1.1%), but rely on stock and asset price rises to "pay for" debt. If bond yields spike due to debt concerns, it will trigger a crash to end the bubble.

Alignment with Hartnett's Recent Views ("All In" Until Bond Crash): Hartnett has repeatedly warned in 2025 that Fed rate cuts and Trump's tax reforms increase stock bubble risks, with investors "front-loading" risk assets, leading to potential bubble formation in the latter half of the year. He prefers bonds, gold, and international assets as hedges, arguing Trump's attempts to control deficits may lead to bonds outperforming expectations, but the overall market is vulnerable to tax reforms and interest rates.
This directly supports the article's description: policy shifts stimulate short-term market prosperity, but a bond crash is the potential terminator. Actual data shows U.S. stocks' global share declined in 2025 (due to trade war concerns), but risk asset inflows hit record highs, reflecting bubble signs.

Overall Rationality: Hartnett's view is highly reasonable, as Trump's actions (e.g., tax reform bill and executive orders) indeed reflect a shift from "detox" (Biden-era inflation control framework) to "gorge," stimulating stocks and growth short-term but amplifying debt and bubble risks long-term. The government's claimed deficit controls (e.g., budget resolution H.Con.Res.14, reducing budget authority by $150 billion in 2025) provide some balance, but tax-cut-led expansion aligns more with "gorge."
If the bond market crashes due to debt burdens (e.g., yields spike), it will validate this warning. However, uncertainty remains: Trump emphasizes growth can self-heal debt, not purely rely on bubbles.