Trumpnomics is primarily a supply side strategy
By Peter Navarro | Real Clear Markets | February 5, 2026
President Trump dislikes an overly strong dollar because it hurts U.S. exporters and manufacturers, and he wants lower interest rates. His Fed nominee, Kevin Warsh, is associated with a strong dollar and is a reputed “inflation hawk” who may be reluctant to cut rates—seemingly just like Fed Chair Jay Powell.
Financial markets are struggling to square that circle. Gold volatility has surged, with the Cboe Gold Volatility Index closing above 44, an unusually elevated reading. Equity volatility has edged higher, and the Treasury yield curve has steepened, signaling investor uncertainty about how a Warsh-led Federal Reserve would balance growth, inflation, and the dollar.
To cut through this apparent contradiction, one need look no farther than how Warsh and Powell view the power of Trumpnomics to generate strong economic growth without triggering inflation.
Trumpnomics is primarily a supply-side strategy built on four engines of growth: tax cuts, deregulation, low energy prices, and protective tariffs designed to attract domestic and foreign investment into new American factories and create jobs.