The article discusses Elon Musk's potential to impact U.S. Treasury supply and mortgage rates through his influence on tariffs and trade negotiations. While Musk is a significant figure, his power is overshadowed by Trump's influence within the Republican Party. The piece posits that escalating trade tensions could enable Musk to back candidates opposing tariffs in the upcoming midterms, consequently hindering Trump's ability to impose tariffs. This scenario might lead to more favorable conditions for the Federal Reserve to adopt a dovish strategy, thus influencing future mortgage rates positively as the political landscape unfolds.
If the trade war takes a turn for the worse and negotiations stall, Musk could influence the situation in ways that may pose challenges for the Trump administration to get what it wants.
With the midterm elections approaching, if the trade tensions escalate, it could provide an opportunity for Musk to support candidates from both the Democratic and Republican parties who oppose tariffs.
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