There’s an old rule in US politics that you know when someone lacks access to the halls of power when they take their complaint to the people. When one of Donald Trump’s biggest Wall Street backers begins using X to criticise the administration, you can assume he failed to get a table at Mar-a-Lago.

Billionaire Bill Ackman went all in on Donald Trump during the election campaign. However, over the weekend, and using guarded language, the fund manager chided the administration for its tariff policy. Subsequently, in much less guarded language, he criticised the Commerce Secretary, Howard Lutnick, for having a conflict of interest. He then reneged, saying “it was unfair for me to lash out”.

Lutnick previously managed a fund which had long bonds — which is to say, it bought treasury bonds in the expectation their price might rise. Lo and behold when his boss’s Liberation Day liberated stock market investors from a good portion of their wealth, much of the money from the sale of stocks flowed into bonds, sending their price sharply higher. Ergo Lutnick allegedly made a killing.

But this is the US, a country where billionaires can donate unlimited money to their favoured candidates, members of Congress make stock market gains with a strong whiff of insider trading, presidents launch memecoins and ex-presidents leverage the contacts they made while in office in order to make themselves phenomenally wealthy. And compared to the questions over Elon Musk’s government contracts, Lutnick’s conflict seems, relatively speaking, small beer.

Besides, it would probably be impossible to prove in court. So Ackman going after Lutnick may reveal less about the Commerce Secretary than about himself. Apparently lacking access to the President, he may be trying to reach Trump through the weak link in his administration’s chain. Lutnick was its point man on tariffs over the weekend, and his media appearances inspired little confidence that the administration had much of a game plan. By criticising Lutnick so vociferously, Ackman may have been trying to get a message through to the top.

It was always expected that this administration would be beset by infighting, since Trump chose his team based not on their coherence but rather their personal loyalty to him. Some of them clearly can’t stand each other. But while in-fighting was thus inevitable, the speed with which it has broken out is striking. Elon Musk, who said last week he would step down from his role at DOGE, is criticising trade advisor Peter Navarro. The national security team is in disarray after Signalgate while Treasury Secretary Scott Bessent’s vague answers to the press about details over the policy left one wondering if he played much of a role in the decision.

With markets tanking, this is a concern. The US is no stranger to market crashes, and they’ve grown quite frequent: the 1997-98 Asian Crisis, the 2000 dotcom crash, the 2008 Global Financial Crisis, the 2020 Covid panic. During each of them, the administration had a skilled economic team at its disposal, along with a central bank with which it enjoyed good relations. It would be hard to say the same thing today. Apart from Scott Bessent, few in Trump’s economic team would be considered the best in their respective classes, while the President is engaged in a running battle with the Federal Reserve.

Despite deep falls, this year’s selloff remained relatively orderly, with few signs of outright panic through the weekend. But were strains to suddenly emerge in any corner of the financial system, investors would have reason to doubt that the administration has the wherewithal and coherence to manage the crisis. In due course, that awareness alone may suffice to induce panic.

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John Rapley is an author and academic who divides his time between London, Johannesburg and Ottawa. His books include Why Empires Fall: Rome, America and the Future of the West (with Peter Heather, Penguin, 2023) and Twilight of the Money Gods: Economics as a Religion (Simon & Schuster, 2017).

jarapley

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