Polymarket data shows that only 17% of users believe Trump's threat to impose all tariffs 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 eventually abandon his tariff threats. Jim Reid of Deutsche Bank noted that the market "has more room to move," adding that the market has previously suffered losses due to 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)
