Economist and gold expert Peter Schiff has an interesting theory as to why President Donald Trump is wreaking havoc on the stock market with tweets and things he’s said this week: He’s purposely tanking the market to force the Fed’s hand and cut interest rates.

The stock market has suffered major losses this week after Trump tweeted several times about China “reneging” and trying to renegotiate things that have already been settled as the world’s two largest economies seek to iron out a new trade deal.

The S&P 500 and Dow both fell 2.1% through Tuesday trading, while the Nasdaq fell 2.5%. Wednesday the market was mostly sideways and then Thursday saw a major plunge before a big rally (note the S&P 500 below on the left, and the Dow on the right) during lunchtime on the East Coast after Trump said a trade deal was still possible this week.

Peter Schiff trade Trump Fed

In Schiff’s latest podcast, he wonders if this is by design, and if Trump knows he won’t get the great deal he’s been promising, so he’s lowering expectations.

Trump also could be using the threat of increased tariffs as a stick because, as Schiff notes, the president incorrectly either believes tariffs are great or he’s simply not being truthful because China does not pay them, U.S. consumers pay them.

So when he says “I am very happy with over $100 Billion a year in Tariffs filling U.S. coffers…great for U.S., not good for China!” as he said in a tweet Wednesday, that is patently false.

Sure, tariffs hurt China if higher prices force Americans to stop buying the goods subject to the tariffs, but consumers are ultimately the losers when it comes to tariffs because they either pay a higher price, or they don’t buy the product altogether, even if it’s something they really need.

With each positive trade announcement, the market shifts up. With each negative tweet from Trump, the market sinks — hence, volatility and wild swings.

“So the markets obviously have to begin pricing in the fact that there’s not going to be a deal, and if that’s the case, there is a lot of downside,” Schiff said.

When Fed Chair Jerome Powell came out last week a bit more hawkish on interest rates as opposed to hinting at a rate cut this year, it may have put a cap on the market, Schiff says.

“What set the low — what was the catalyst for this rally — was the Fed getting more dovish. It went from, ‘We’re going to keep hiking rates’ to ‘We’re finished hiking rates.’ It went from, ‘Quantitative tightening is on autopilot’ to ‘Quantitative tightening is going to end over the summer,'” Schiff said. “And so that shift, where the Fed went from being hawkish to dovish, that started the rally.

“Well, this more recent shift, where the Fed changed expectations again and disappointed the markets by saying, ‘Hey, we’re not as dovish as you think. We’re not going to cut rates.’ That, I think, capped the market. And now, Trump coming in and taking away the prospects of this great trade deal, well, that’s like a one-two punch, and I think this bear market rally, like I said, is over and we’re going lower.”

That’s where Schiff floats his theory for why Trump could be causing so much volatility: He’s dying for a Fed rate cut.

“I think Trump knows the only chance he has of postponing the onset of this recession until beyond the 2020 election is to get the Fed to preemptively cut interest rates and launch QE4, which is something that Trump also says he wants,” Schiff said.

What he’s referring to are recent tweets and statements where Trump called on the Fed to slash rates a whopping 1% and restart quantitative easing, which is recession-era stimulus while the economy is supposedly booming, coming in at 3.2% the first quarter of 2019.

Schiff on Thursday also retweeted an interesting theory from ZeroHedge that could help somewhat explain what’s going on with all of the volatility.

Schiff also blasted the Fed over its sudden concern over corporate lending and the rising debt from so much lending, which … is exactly what the Fed wanted.

“The only reason that corporations have borrowed so much money was because the Fed made it so enticing,” Schiff said. “The Fed kept interest rates artificially low specifically so corporations would keep borrowing money. I mean, it makes no sense for the Federal Reserve to now be upset that corporations did exactly what the Fed wanted corporations to do. It’s like the Fed’s the bartender, it liquors everybody up, and then complains that there are too many people that are drunk.”

Editor’s note: What do you think is the reason for this week’s volatility? Is Schiff or ZeroHedge on to something? Share your thoughts below.