Analysis: Wall Street Bets Again on Trump TACO Trade, Prediction Market Shows Only 17% Probability of Tariffs on Europe

Odaily According to Polymarket data, only 17% of users believe that all tariffs threatened by Trump on 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 back down from his tariff threats. Deutsche Bank's Jim Reid noted that the market "has room for more volatility" and stated that markets have previously suffered losses from overreacting to tariff threats. UBS Chief Economist Paul Donovan believes the market is behaving rationally, and bond investors do not seem to be taking these threats too seriously. (Fortune)