Rabobank report cited Donald Trump saying US growth could be 15% or higher if a future Fed Chair, Kevin Warsh, “does his job”. It said it was unclear whether 15% referred to annual growth, growth over the remaining two-and-a-half years of a presidency term, or whether it was nominal or real.
The report linked this to expectations that policy could allow faster growth, and it referenced Financial Times coverage about foreign money continuing to flow into the US. It described this environment as supportive for the US dollar.
Policy Pressure And Growth Expectations
It also noted reports that the US may exempt large technology firms from upcoming chip tariffs. These exemptions would be tied to foreign direct investment commitments from Taiwan Semiconductor Manufacturing Company (TSMC).
The report said corporate adoption of AI is increasing and could lift productivity, while noting that different AI uses may have different effects. For near-term data, it pointed to US retail sales and the NFIB small business survey as key releases.
The key signal we’re getting is a push for the Fed to run the economy hot, prioritizing growth even if inflation remains sticky around the 3.2% level seen last month. This narrative is supported by the strong 3.5% annualized GDP growth we saw in the final quarter of 2025. Derivative strategies should now favor a pro-growth, higher-volatility environment for interest rates.
Despite any political noise, we see foreigners continuing to pour money into America, a trend dubbed ‘Bash All Day, Buy All Night’. Treasury data from late 2025 confirmed this, with foreign holdings of U.S. securities reaching new highs. This fundamental inflow supports long positions on the U.S. dollar, making call options on the dollar index attractive against other major currencies.
Market Positioning And Near Term Catalysts
We believe the AI boom is now translating into real productivity gains, justifying higher valuations in US markets. This trend fueled much of the Nasdaq 100’s impressive 30% rally throughout 2025. Continued bullishness on US equity indices, perhaps through call spreads to manage costs, seems warranted.
Furthermore, the administration’s pragmatic approach to industrial policy, such as exempting Big Tech from some chip tariffs in exchange for investment, reduces tail risk for the market. This selective neo-mercantilism provides a stable backdrop for key sectors like semiconductors. We see this as a signal to potentially sell out-of-the-money puts on tech-focused ETFs.
In the immediate term, we are watching the upcoming retail sales and NFIB small business survey data very closely. Strong numbers would reinforce the hot economy narrative and likely spark short-term volatility. Traders might consider short-dated options to position for a potential upside surprise in these figures.
