Analysis: Wall Street is once again betting on Trump's TACO deal, with market forecasts showing only a 17% probability of tariffs being imposed on Europe.

GateNews

2026-01-20 12:49:22

Odaily Planet Daily reports that Polymarket data shows only 17% of users believe that all tariffs threatened by Trump against Europe will take effect on February 1st. This market sentiment reflects the “TACO” (Trump Always Chickens Out) trading strategy, where investors bet that Trump will ultimately abandon his tariff threats. Jim Reid from Deutsche Bank pointed out that the market “still has room for greater volatility” and noted that the market previously suffered losses due to overreacting to tariff threats. UBS Chief Economist Paul Donovan believes the market is performing rationally, and bond investors do not seem to be taking these threats too seriously. (Fortune)

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