Five weeks into his new term, President Trump continues to make headlines and rattle the global cages. During his first meeting with cabinet members, Trump addressed several controversial topics, one of them concerning his close advisor, Elon Musk. Trump backed Musk’s government overhaul, hinting that over a million federal workers who ignored a productivity email could be fired. “Those people are on the bubble,” Trump said. He also suggested that some employees might not even exist while others might not be alive anymore. The White House confirmed only 40% of the 2.3 million federal workforce responded, leaving many jobs in question. As been suggested, some federal agencies quietly advised workers to ignore Musk’s request.
Now heading the Department of Government Efficiency, Musk vowed to cut $1 trillion, about 15% of federal spending. Trump praised Musk’s efforts, asking if anyone objected. The response? Silence and laughter.
Economic Ripples
Trump’s plan could shake the U.S. economy. Job losses in the federal sector could have a ripple effect on consumer spending, starting with the retail industry. Unlike retail, the tech industry might thrive as automation takes center stage in government operations. The energy sector could see major shifts as Trump plans to slash the EPA’s workforce by 65%, likely boosting fossil fuels while challenging green energy firms.
Internationally, Trump seeks economic gains from Ukraine. A proposed mineral resources deal with President Zelensky could bring rare earth minerals, crucial for EVs and batteries, into U.S. hands. This could benefit American manufacturing while undercutting China’s dominance in the sector.
Musk’s Businesses Might Be Affected
On a slightly different financial spectrum, Musk’s government role potentially puts Tesla (TSLA), SpaceX, and X (formerly Twitter) in a tricky position. Tesla, which has benefited from federal incentives, could see shifts in subsidies and regulations. His policy influence may also attract antitrust scrutiny, raising concerns about unfair advantages in securing government contracts. With Trump and Musk at the helm, the next four years promise a high-stakes economic shakeup. Buckle up.
Is TSLA a Buy, Hold, or a Sell?
Let’s see how Wall Street’s analysts rate Tesla nowadays. Based on 35 analysts’ ratings, it’s a Hold. The average price target for TSLA stock is $357.68, implying a 23.00% upside potential.
