President Donald Trump's unchecked spending spree has investors concerned, according to a report Monday.
The president is shaking loose cash to advance his policy priorities — whether it's taking $200 billion from Fannie Mae and Freddie Mac to pay for mortgage bonds or scrounging $20 billion from a Treasury fund to underwrite a currency swap with Argentina — and some analysts told Axios the moves were constitutionally questionable.
"The executive branch is getting very creative using the pockets of money at their disposal with no congressional oversight," said Ed Al-Hussainy, portfolio manager at Columbia Threadneedle. "[It's] communism with capitalist characteristics."
BCA research strategists, in a call with clients, compared the Trump policies to the types of moves made by New York City Mayor Zohran Mamdani and Chinese leader Xi Jinping, and Peter Tchir, head of macro for Academy Securities, warned his clients that Trump will keep cutting out Congress to fund his policy goals.
"I would not think that they will stick to traditional methods to accomplish their goals," Tchir said. "They've said what they want. The market seems to be ignoring them."
But investors are taking note as Trump moves to take control of the Federal Reserve and its balance sheet, which l-Hussainy said would be the president's "ultimate win."
"This can have consequences," Axios reported. "Look to Japan: Years of central bank bond-buying made government borrowing easy, and debt exploded as a result. When inflation arrived post-pandemic, the Bank of Japan had less wiggle room to respond, and the yen took a hit."
Federal prosecutors have opened an investigation into Fed chairman Jerome Powell — a longtime target of Trump's wrath — over his testimony last summer about the central bank’s renovations, and that move sank stock futures, weakened the dollar and goosed gold prices to record levels.
But the White House justified all the president's moves.
"The American people gave President Trump a resounding Election Day mandate to smash Washington, D.C.'s broken status quo and actually put Americans and America First," White House spokesman Kush Desai told Axios. "That includes advancing an America First agenda to turn the page on Joe Biden's affordability crisis and safeguard our national security without needlessly blowing taxpayer money."