Tariffs are absolutely nuking growth. Containerships heading to U.S. ports are grinding to a halt. Trucking is next. Retail layoffs will follow. By June, we’re in a recession. It’s already in motion.
Some fresh real-world pain from just this past week
* **Southwest Airlines CEO:** *"I don’t care if you call it a recession or not - in this industry, that’s a recession."*
* **Chipotle COO:** *"Saving money because of concerns around the economy was the overwhelming reason consumers were reducing the frequency of restaurant visits."*
* **PepsiCo CFO:** *"Relative to where we were three months ago, we probably aren’t feeling as good about the consumer now."*
Tariffs might push inflation higher in the short term, but the real killer will be demand destruction. The Fed won’t be able to tighten - they'll have to cut rates fast.
That’s where TMF comes in.
When the market finally wakes up to the slowdown, a 100bps collapse in long duration treasuries could easily send TMF up 60-80%.
If you're feeling brave - buy $51 calls expiring late May for 40x your money.
You might ask - why not SQQQ or puts on SPY/QQQ if I’m betting on a recession? Because if Trump pulls the tariffs before major damage is done, QQQ would moon. Inflation and employment were already cooling. CPI came in lower than expected for February and March. Without tariffs, the Fed would have room to pivot dovish - and TMF would still print.
Everyone’s panicking that foreigners are dumping treasuries and blowing up the bond market. Wrong. Treasuries are fifteen times bigger than the entire European bund market. There’s no real alternative at this scale. Central banks need dollars unless they want to nuke their own currencies. And if they tried to repatriate, they'd have to book monster losses. Nobody’s doing that unless they’re actively trying to get fired. Maybe new foreign buying slows a little. Mass selling? Not happening. Any meaningful slowdown in the economy will cause domestic demand for treasuries to surge, easily offsetting any softening in foreign demand.