STEVE INSKEEP, HOST:
Whatever investors were expecting from President Trump, they apparently haven't gotten it. In recent weeks, the stock market has given back all of its gains since Trump's election and then some. It's a correction now - a 10% drop. One factor is the president's constantly changing actions on tariffs, and now the president is changing his rhetoric. NPR senior White House correspondent Tamara Keith has been listening.
TAMARA KEITH, BYLINE: Days before the November election, President Trump was warning that if he lost, there'd be a 1929-style market crash.
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PRESIDENT DONALD TRUMP: The only reason the stock market is doing good is because they all think Trump is going to be elected. So I believe that's true.
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KEITH: After he won, the markets did rally, and Trump took all the credit. Here he was at a Florida press conference in early January.
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TRUMP: Since my election, the stock market has set records. The S&P 500 index has broken above 6,000 points for the first time ever - never even close.
KEITH: The S&P 500 officially fell into correction territory yesterday, closing down more than 10% from the high it hit in February. And Trump's tune has changed.
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TRUMP: You can't really watch the stock market.
KEITH: That was Trump over the weekend on Fox News.
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TRUMP: You can't go by that. You have to do what's right. What we're doing is we're building a tremendous foundation for the future - tremendous foundation.
KEITH: Since his first term in office, President Trump has repeatedly tied his political fortunes to the markets. But now, as his on-again, off-again tariff policies and sweeping cuts to the federal government create uncertainty, investors have jitters. Americans alarmed at what's happening to their 401(k)s can easily become a political problem for a president who has promised to make the nation wealthy. Trump now argues the economy is in a period of transition, as he did when asked about the sell-off earlier this week.
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UNIDENTIFIED REPORTER: So, Mr. President, when you look at the markets selling off, that didn't concern you?
TRUMP: Nope.
UNIDENTIFIED REPORTER: And where do you see it going?
TRUMP: Doesn't concern me. I think some people are going to make great deals by buying stocks and bonds and all the things they're buying. I think we're going to have an economy that's a real economy, not a fake economy.
KEITH: Stephen Moore was an economic adviser to Trump during his first term and is now at the Heritage Foundation.
STEPHEN MOORE: Trump is constantly checking how the stock market is doing. He's very attentive to that.
KEITH: He says he's been in Oval Office meetings where Trump asked repeatedly for updates on the markets. Now, like Trump, Moore is urging patience.
MOORE: You know, we do need to do a readjustment. Everyone knows we can't stay on the course we're on, and that will cause a little bit of chemotherapy. And then once you get done with that, you're healthier again and structurally, for the next 30 years, we're in much better shape. That's the way Trump looks at it.
KEITH: But while most presidents try to calm economic waters, Matt McDonald says Trump's tariff announcements are stirring them. McDonald is CEO of Penta Group and has worked at the intersection of business, economics and politics for decades.
MATT MCDONALD: I cannot conceive that President Trump doesn't want the markets to be higher.
KEITH: McDonald says the question is how long President Trump is willing to tolerate stock market pain.
MCDONALD: Politically speaking, this is the time to take that pain if you're going to incur the pain.
KEITH: The midterm elections, he says, are still far away.
MCDONALD: The challenge is that there's a lot of other stuff going on. And as the Fed is trying to finish the soft landing on inflation and rates and all the rest of the stuff - is that injecting tariffs into a pretty volatile environment complicates the entirety of the economic picture.
KEITH: McDonald says the risk is that this pain moves from the stock market to the job market and the wider economy, and that's playing with political fire.
Tamara Keith, NPR News. Transcript provided by NPR, Copyright NPR.
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