So here’s the latest galaxy-brain theory bouncing around Trump world:
President Trump is purposely trying to crash the stock market and tank the economy to bring down interest rates.
Why? Apparently, it’s all part of a master plan to refinance the national debt at lower rates and save the country billions in interest payments.
It’s so stupid: this is basically the economic equivalent of lighting your house on fire so you can renegotiate your mortgage.
At first, this was a fringe theory. But it got a major boost when Trump reposted a TikTok video talking about it, calling it a brilliant 4D chess move.
But here’s the thing: it’s complete nonsense.
The stock market is crashing because recession risks are skyrocketing. And interest rates are going down for the same exact reason.
Through his new wave of tariffs, Trump has basically launched a trade war against the entire planet. If these tariffs stay in place, the U.S. average tariff rate could reach its highest level in over a century.
That means prices on everything—from coffee to car parts—will spike, choking off consumer spending and business investment, the two engines that keep the economy running.
Two Forces Driving Rates
Let’s talk about how interest rates actually work. In the U.S., they’re shaped by two main forces: the Federal Reserve, which sets short-term interest rates, and the bond market, which determines longer-term rates based on what the Fed does plus expectations about inflation, economic growth, and other macroeconomic factors.
Right now, long-term rates are falling because investors are piling into bonds. And they’re doing that for two reasons.
First, they think the Fed will start cutting rates to cushion the economy from Trump’s trade policies. Second, they’re worried the tariffs could push us into a full-blown recession.
In a typical recession, demand drops, inflation cools, and that puts downward pressure on interest rates.
But this time’s weird. Trump’s tariffs could push inflation up even as economic growth slows down.
You might’ve heard the term stagflation. That’s what we’re talking about here: the toxic combo of high inflation and low growth. And it’s exactly why rates aren’t falling even faster—there’s still inflation anxiety baked into the bond market.
Let’s Enter the Conspiracy Zone for a Second
But fine, let’s humor the crazy theory that’s going around. Let’s say Trump is trying to crash the economy to bring interest rates down so he can refinance the national debt.
Could he actually pull that off? No. Here’s why.
The U.S. is currently paying an average interest rate of about 3.3% on its $36 trillion national debt. That’s already lower than where market rates are today. For instance, the 10-year Treasury is yielding around 4%, and the 30-year is closer to 4.4%.
So for this plan to even begin to make sense, interest rates would need to plunge well below current levels—down to 2% or 3%.
And even if that happened, it wouldn’t be some game-changing win. Sure, over time, some of the debt matures and gets rolled over. Refinancing that portion at lower rates—say, 3% instead of 5%— could help around the edges.
But here’s the problem: you can’t just call up America’s creditors and refinance the entire $36 trillion like its a mortgage. That’s not how any of this works.
Most of the national debt is in short-term Treasury bills and notes that are constantly rolling over.
Even if rates fall, you’d still be refinancing gradually, over time, as debt matures—not in one big bang.
And you definitely can’t shift all that short-term debt into 30-year bonds. The demand just isn’t there. Long-term Treasuries—those maturing in 20 to 30 years—make up only about 17% of the total market. Try cramming trillions into that, and you’d blow up the bond market.

Not to mention, even if you could refinance everything, crashing the economy to do it would backfire massively.
Recession means people lose jobs, businesses go under, and tax revenue falls. All of that leads to deficits going up and the national debt increasing.
So instead of saving money, you’ve made the problem worse.
As you can see, this theory going around isn’t some genius financial play. It’s a reckless gamble built on a total misunderstanding of how debt markets work.
Trump is promoting this theory because he wants people to believe there’s some brilliant strategy behind the economic pain from his tariffs. That there’s a reason you’re taking a hit.
But there isn’t.
This isn’t 4D chess. It’s just reckless policy.
And unless Trump backs off the tariffs—or someone stops him—we’re in for a lot more pain.
I’m hoping it’s a 10d chess move where we somehow move to the digital dollar within the next year.
If 50% of US debt is in bills, why couldn’t the new administration refinance a bunch of that debt into lower interest, longer-term notes or bonds?