4/21/2025
The Stats:
The Dow: down 2.48%
S&P 500: down 2.36%
Nasdaq: down 2.55%
Down 16% from record highs set 2 months ago
Basic Math On Volatility
10% of 100 is 10
When you go down 10% from that number you would do 100-10=90
10% of 90 is 9
When you go up 10% from 90 you would do 90+9=99
Going down by 10% and then up by 10% doesn’t bring you back to the original number
Freddie Mac (short for the Federal Home Loan Mortgage Corporation) is a U.S. government-backed company that helps make home loans more available and affordable. It does this by buying mortgages from banks and other lenders, giving them more cash to issue new loans. Freddie Mac then bundles these mortgages into securities and sells them to investors, which helps increase the flow of money in the housing market.
Consequences of Foreign Selling of US Bonds
Higher Interest Rates
When many investors sell bonds, prices drop.
Bond yields (interest rates) go up to attract new buyers.
That pushes up borrowing costs across the economy (e.g., mortgages, business loans, credit cards).
Stronger Pressure on the U.S. Dollar
Foreign investors selling bonds means they're also selling U.S. dollars to convert back to their own currencies.
This can weaken the dollar, making imports more expensive and potentially increasing inflation.
The diminishing confidence of foreign investors in the US Markets during Trump’s comments on the Fed contributes to these decreases in US dollar value.
Trump appointed Powell, however the Fed is supposed to be non-partisan
The fed is held accountable by a seven-member Board of Governors based in Washington, DC
If Trump can fire Powell, it will cause international investors to question the sanctity of investing in US markets
