‘Don’t Rely on the Trump TACO Trade During Wartime,’ Says Former JPM Strategist

FomoAnxiety · 2026-03-05T22:01:30+00:00

Market participants relying on the “TACO trade” may face challenges during geopolitical conflicts, as emphasized by strategist Marko Kolanovic. He asserts the influences of war, like the U.S.-Israeli conflict with Iran, are harder to reverse than economic policies, making the strategy less reliable.

FomoAnxiety

2026-03-05 22:01:30

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Market participants who follow the so-called “TACO trade” may find that strategy to be less reliable during a geopolitical conflict. The term, which stands for “Trump Always Chickens Out,” refers to the belief that U.S. President Donald Trump often reverses market-shaking policies after initially announcing them. However, former JPMorgan Chase JPM -2.04% ▼ strategist Marko Kolanovic warned that this approach may not work the same way during wartime.

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In particular, Kolanovic noted that the ongoing U.S.-Israeli conflict with Iran, now in its sixth day, involves developments that are much harder to undo than economic policy decisions. In a post on social media, he explained that trade policies, such as tariffs, can be quickly changed by a government decision. By contrast, military conflicts and their economic consequences, such as damage to infrastructure or disruptions in energy markets, are far more difficult to reverse.

Previously, the TACO trade gained attention after Trump’s “Liberation Day” tariff announcement, which initially caused markets to sell off before rebounding when the White House later softened the policy. Because of this pattern, investors sometimes expect harsh policies to be rolled back. However, Kolanovic argued that the current situation is different. According to him, many events tied to the Iran conflict are now outside of Trump’s direct control, which means that they cannot simply be undone with a policy change or a social media post.

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