Big Take Trump Keeps TACOing. What If Markets Stop Caring?
9 snips
Jan 28, 2026 
John Authers, a Bloomberg markets columnist, and Robert Armstrong, a Financial Times columnist who coined 'TACO'. They dig into how traders react when presidential threats fizzle. Short takes on the April 2 tariff shock, Bloomberg Economics’ TACO stats, why bond markets matter more than stocks, and whether muted market responses could encourage bolder political brinkmanship.
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Markets Trade On Expectation Of Walkbacks
- Markets increasingly buy when President Trump threatens extreme policies because they expect walkbacks.
- Bloomberg Economics found roughly 70% of threats didn't fully materialize between 2024 and Jan 2026.
Liberation Day Shock Then Reprieve
- April 2, 2025's 'Liberation Day' speech shocked John Authers and Robert Armstrong and briefly crashed markets.
- Trump then cut deals, paused tariffs, and markets recovered as the threat softened.
Taco Works Unevenly Across Countries
- Taco applies unevenly: strong adversaries can force walkbacks, but weaker countries face follow-through.
- Armstrong calls it 'taco for the strong, faffo for the weak.'