Wall Street has rolled out a new index designed to predict when President Donald Trump will back down from market-disrupting policy decisions. They’ve called this phenomenon “TACO,” which stands for “Trump always chickens out.” This shows how much the financial world is trying to stay ahead of the president’s unpredictable policy shifts.
According to Mediaite, the index was created by Deutsche Bank strategist Maximilian Uleer. It tracks the various pressures President Trump is under and tries to measure how likely he is to change course on a given issue. The term “TACO” itself was first coined by Robert Armstrong to describe moments when President Trump backs down under external pressure.
The index looks at several factors to make its predictions: the one-month change in Trump’s approval ratings, how the stock market is performing, and whether bond markets and the general public expect higher inflation. Together, these factors give a picture of the overall pressure the president might be feeling at any given time.
The index is already under a harder test than Liberation Day
Right now, the index is showing a higher pressure reading than it did during “Liberation Day,” when the S&P 500 dropped sharply after massive tariffs were announced on nearly every country. That this reading is even higher now signals that the current situation is putting more pressure on Trump than that earlier shock did. Critics and observers have been closely watching how Trump responds to mounting pressure across different areas of policy.
Markets have been feeling the strain. As of close on Thursday, the S&P 500 was down over 1.7%, and the Nasdaq fell 2.38%, pushing its recent losses into correction territory. This current pressure is hitting the economy and Trump’s political standing harder than the previous tariff turmoil, largely due to the shock hitting energy markets.
There is also a widely held belief on Wall Street that Trump is likely to pull back on a policy if the stock market falls around 5% from its recent highs. Jose Torres, a senior economist at Interactive Brokers, noted this last week, offering a potential benchmark for when a “TACO” moment might happen.
Adding to this, Trump recently announced an additional ten-day grace period to continue negotiations with Iran. He also promised to hold off on targeting oil production facilities, even as speculation about a possible ground invasion has been growing. Iran, however, has not taken kindly to how these talks have been framed, with Iran pushing back on Trump’s claims about the negotiations and accusing him of misrepresenting the situation.
Whether these actions are a direct result of the pressure the index is measuring remains to be seen, but it is certainly giving analysts a new way to read and anticipate the president’s next move.
Published: Mar 27, 2026 02:20 pm