TrumpMarkets
|2 min ReadTrump's Midterm Panic: $40 Oil & The $2,000 Stimulus Check
Jax Morales
Senior Analyst
Published
Jan 16, 2026
The macro landscape for 2026 is being entirely dictated by Trump’s desperation to survive the midterm elections. Facing a historical polling deficit of 20 points and a 40% approval rating, the administration knows that losing Congress means a second term paralyzed by impeachment hearings. Consequently, the White House is abandoning "re-inflation" trades to go all-in on "affordability," deploying a "kitchen sink" strategy to crush the cost of living by any means necessary. The tip of this spear is Energy: Trump is targeting a psychological gasoline price of $2.25 per gallon by directly seizing control of Venezuela’s oil reserves—18% of the global total—to flood the market. This is not ideology; it is a raw resource grab designed to force crude prices down to the $40–$50 range, effectively sacrificing OPEC’s pricing power to secure suburban votes.
Stimulus Bribes & The AI Risk
Beyond deflationary energy, David Woo assigns a 65% probability to a massive pre-election fiscal injection. The administration plans to weaponize tariff revenues to fund $2,000 "rebate checks" for Americans earning under $75,000, likely bundling this with Obamacare subsidies in a Reconciliation Bill to bypass Senate gridlock. This move is designed to reverse the "K-shaped" recovery, rotating capital away from luxury assets into Consumer Staples as working-class disposable income spikes.
However, this new "America First" realism destroys the safety premium for small nations, making Emerging Markets uninvestable while creating a structural bid for Gold and Defense stocks as global insecurity rises. The entire house of cards rests on the US equity market: with AI CapEx projected to grow another 50% in 2026, any popping of the tech bubble would obliterate the capital gains tax receipts needed to fund these populist handouts, instantly turning a political strategy into a fiscal crisis.
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