Deutsche Bank analysts quantify Trump's statements: the "pressure index" predicts when Trump will back down.

As the conflict between the U.S. and Iran continues to drive up oil prices and inflation expectations, Deutsche Bank analysts have combined indicators such as President Trump’s approval ratings, inflation expectations, stock market performance, and changes in U.S. Treasury yields to create a “Trump Pressure Index” aimed at capturing the timing of potential shifts in Trump’s policies.

From tariffs to war, Trump’s “TACO” is back in the spotlight

According to the Financial Times, since Trump launched military action against Iran, the global oil market has experienced severe turbulence, with U.S. gasoline prices soaring by more than 30%. In the face of a war that simultaneously impacts the energy market and voters’ wallets, investors are beginning to replay last year’s tariff war script: betting that Trump will ultimately back down again.

This phenomenon has a specific name on Wall Street: “TACO (Trump Always Chickens Out),” meaning “Trump always backs down.” This term was born from Trump’s past instances of imposing high tariffs on various countries, only to repeatedly retreat afterward. Now, as the war with Iran drags on, TACO has once again become the hottest topic of discussion in the market.

(TACO trading profit secrets? Polymarket always bets “no,” with a return rate of 12%)

Deutsche Bank quantifies Trump’s “capitulation threshold”

To establish a quantifiable framework for this market phenomenon, Maximilian Uleer, head of cross-asset strategy at Deutsche Bank, has designed a “Trump Pressure Index” aimed at assessing the level of policy pressure the president faces at specific times.

This is Wild.

Deutsche Bank has developed an index that helps to predict the next TACO by Trump.

It has proven effective in previous big Trump pivots.

The “Pressure index” combines one-month change in approval ratings, one-year inflation expectations and performance of the… pic.twitter.com/aCFpU4nnrI

— Nic (@nicrypto) March 26, 2026

The index comprehensively tracks four core variables: the monthly change in Trump’s approval ratings, market expectations for one-year inflation, the performance of the S&P 500 index, and the trend of U.S. Treasury yields. Uleer noted that when all four indicators deteriorate simultaneously and the index continues to rise, the likelihood of Trump adjusting his policy stance significantly increases.

Trump Pressure Index hits a high, surpassing Liberation Day

Notably, the index has now risen to its highest level since Trump returned to the White House, even exceeding last year’s tariff “Liberation Day.”

Currently, the yield on the 10-year U.S. Treasury has risen by about 0.4 percentage points this month, marking the worst monthly performance since the end of 2024; the S&P 500 index has fallen more than 1.7% in recent trading days, while the Nasdaq has dropped more than 2.3%.

Monica Defend, head of research at AXA Investment Managers, pointed out that whenever the yield on the 10-year Treasury approaches 4.5%, the Trump administration tends to become noticeably tense and takes action: “As investors, we must anticipate this in advance.”

“Oil prices” become the most direct source of political pressure

Uleer revealed that among all pressure variables, oil prices have the most direct political sensitivity for Trump. The closer it gets to the midterm elections, the stronger this red line’s constraints on the White House become.

He also noted that the Trump administration has developed a fixed “verbal intervention” pattern: whenever U.S. crude oil prices approach $95 to $100 per barrel, the White House strengthens its signals to cool down the situation, including hinting at progress in peace negotiations with Iran or announcing consideration of using the Strategic Petroleum Reserve. This “verbal price control” strategy has so far somewhat suppressed further price surges.

Jose Torres, a senior economist at IB Interactive Brokers, proposed another widely circulated market rule of thumb: “If the stock market falls about 5% from its peak, Trump usually shows a tendency to retreat on policy.”

The market remains in a state of uncertainty

Despite the pressure index providing a relatively objective reference framework, most investors still choose to hold back. After all, oil prices could either skyrocket to $150 per barrel due to escalating tensions or reverse instantly due to a single social media post from Trump, making direction extremely difficult to judge.

Now, Deutsche Bank’s pressure index serves as a relatively objective measure for the market in this highly uncertain environment.

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