Both Democrats and Republicans avoid the boring, complex solutions to inflation—like housing density, healthcare reform, and aggressive antitrust. Instead, they opt for politically palatable but ineffective measures like tariffs (Republicans) or short-term subsidies (Democrats), ensuring the core problems remain unsolved.

Most proposed affordability measures like tax credits or subsidies offer only micro-level relief to households and won't change the broader economy. Tariff policy is the significant exception. Lowering tariffs would have a sustained impact by directly reducing inflation, supporting real income growth, and potentially enabling the Fed to cut interest rates.

The administration's focus on affordability is a targeted political effort, not a broad economic one. Policies are designed to appeal to lower-income consumers, younger voters, and renters—the specific demographics where the president's approval ratings have seen the largest declines. This makes affordability policy a direct tool for political recovery.

Regardless of the national deficit, expect more fiscal stimulus as politicians prioritize winning elections. The need to address voter concerns about 'affordability' ahead of midterms will drive spending, creating a 'run it hot' environment favorable to hard assets.

Investors should not over-react to congressional turbulence. Many of the most market-relevant policies—on trade, regulation, industrial strategy, and AI—are executed via executive authority, not congressional action. This means their trajectory is unlikely to be altered by events like a shutdown or shifting political dynamics in Congress.

The U.S. intervention in Venezuela reflects a broader domestic trend of fast, unilateral policymaking via executive authority. This pattern bypasses congressional consensus-building, heightening policy uncertainty and systemic risk premiums for investors across all sectors.

While the base case is that the President would replace tariffs struck down by the Supreme Court, there's a growing possibility he won't. The administration could use the ruling as a politically convenient way to reduce tariffs and address voter concerns about affordability without appearing to back down on trade policy.

The administration's policies, including tariffs and deregulation, form a cohesive strategy to spark nominal growth. This supply-side approach is considered the only politically and economically feasible way to manage the massive national debt burden built over decades, avoiding direct spending cuts.

Despite expected legislative gridlock, investors should focus on the executive branch. The president's most impactful market tools, such as tariff policy and deregulation via executive agencies, do not require congressional approval. Significant policy shifts can therefore occur even when Congress is divided and inactive.