CAPITAL MARKETS  

Top Headlines

Trump order aims to curb independent agency power

SEC delays Treasury clearing rule compliance by a year

NYSE to move Chicago exchange to Dallas

Banks split on CME Treasury's clearing model

Trump to nominate heads of CFTC, CFPB, OCC

The Trump administration’s reversal on established financial services regulatory norms continues at a blistering pace. Regulatory requirements are not just being diminished going forward, but enforcement cases that were already in progress have been dropped. As expected, tariffs and other geopolitical headlines are contributing to market volatility. Remember …  ‘volatility’ is a good thing for our biggest clients.

What does this mean for our clients?

• Target the funny money! The floodgates have been opened for traditional financial services firms to dive into digital assets as much as they want. 
• Countless firms will be launching new investment products (ETFs, indices, crypto, futures, options, etc), so we should position ourselves as a key partner for marketing those products.
• Solutions providers that focus on compliance risk will struggle to survive. However, solutions providers who focus on trading risk should thrive.

INSIGHTS FROM OUR BRIEFS

Trump Administration's Economic Policies

The Trump administration's economic policies are creating significant market uncertainty. 

• Tariffs: Warren Buffett has criticized Trump's tariff policies, describing them as "a tax on goods" that could trigger inflation and hurt consumers. Buffett noted that tariffs are "an act of war, to some degree" with potential negative global consequences [3]. 
• “Mar-a-Lago Accord”: Additionally, there are concerns about the administration's approach to government debt, with rumors of a "Mar-a-Lago Accord" suggesting radical measures like forcing foreign creditors to swap Treasury bonds into ultra-long-term bonds [11]. 
• Return of the Bond Vigilantes: The bond market has emerged as a significant opponent to Trump's economic approach [9].

Cryptocurrency Market Evolution

• Cryptocurrency is experiencing significant growth in the investment landscape, with Trump’s plan to launch a “Cryptocurrency Strategic Reserve” was massive news for the industry.
• Crypto ETFs are projected to become the third-largest asset class in the rapidly growing US industry according to State Street [2]. 

Banking Regulation and Financial Stability

• Regulation in the traditional sense is going to be non-existent for the foreseeable future.
• The SEC has dropped cases and the CFPB has been shuttered. The FDIC, which insures consumer deposits and monitors banks to prevent failures, has lost approximately 10% of its workforce through firings and deferred resignations. 
• The Trump administration's cuts to financial regulatory agencies, particularly the FDIC, are raising serious concerns about financial stability.

Marketing Strategy Implications

1. Hellllloooo Crypto!: The US government’s dramatic shift in its regulatory stance toward digital assets means our traditional audience is now much more receptive to marketing campaigns from firms in the crypto industry.
   • Now would be a good time to call on the big crypto players: Coinbase, Crypto.com, Bybit and … yes … Binance.
2. Risk Management Focus: Consider developing marketing content around trading risk management solutions given the expected market volatility.
3. Watch for geographic expansion: While traditional players from Europe might pull back on their involvement in US markets, don’t be surprised if firms from the Middle East and Asia increase their marketing efforts to attract US business.

Timing Considerations: Right now is “Go time.”