<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>In the past year, some of the </span><a href="https://www.9news.com.au/finance" rel="" target="" title="biggest swings on the financial markets"><span>biggest swings on the financial markets</span></a><span> can be directly attributed to one man: </span><a href="https://www.9news.com.au/donald-trump" rel="" target="" title="Donald Trump"><span>Donald Trump</span></a><span>.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The sharpest drop came from his tariff announcement on his </span><a href="https://www.9news.com.au/world/what-will-trumps-liberation-day-tariffs-mean-for-australia-and-how-should-we-respond/bdaf3ae6-d17a-4dc3-b84e-3f81919a4a2b" rel="" target="" title="so-called Liberation Day"><span>so-called Liberation Day</span></a><span>.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The sharpest jump came several days later when he backed down.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/world/donald-trump-iran-school-missiles-tomahawk-explosion-usa-responsibility/2f613d33-f9fe-40e9-8cb8-1e9e88564e73"><strong><span>Trump denies knowledge of report blaming US for school bombing</span></strong></a><span></span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>And a few days later, the market tanked again when he announced new tariffs.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>For traders around the world, including in </span><a href="https://www.9news.com.au/australia" rel="" target="" title="Australia"><span>Australia</span></a><span>, so much of their financial future is tethered to the unpredictable nature of the president.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>And the results are far more severe this time around than in Trump's first term.</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/world/donald-trump-taco-wall-street-chickens-out-financial-market-usa-news/a92a416d-13cd-49cf-96ac-62007f7cf5a2" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"In Trump's first term, there were two things that held him back," independent economist Saul Eslake told </span><a href="https://www.nine.com.au/" rel="" target="" title="nine.com.au"><span>nine.com.au</span></a><span>.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"One was that he didn't expect to win, and so he didn't really have a plan.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"And second, there were adults in the room, both on his staff and in the cabinet, to restrain his worst instincts."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>His volatility has also </span><a href="https://www.9news.com.au/finance/us-dollar-falling-why-worlds-king-currency-going-backwards-explained/a7d39032-98ca-4509-ae72-1967171b6ec6" rel="" target="" title="rattled the traditional safe haven of investors: the US dollar"><span>rattled the traditional safe haven of investors: the US dollar</span></a><span>.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"When markets feel very uncertain about the economic or geopolitical outlook, the US dollar goes up and US bond yields go down," Eslake said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Well, not any more."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Now, that safe-haven status has switched to the Swiss franc and to precious metals like gold and silver.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/world/iranian-footballers-asylum-australia-news-donald-trump-iran-deportation-migrants-usa-updates/eb00f5c5-2b5d-428a-a0c4-96c1fc9a9d80"><strong><span>Trump has been giving the Iranians the boot. Now he demands asylum</span></strong></a><span></span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>But traders have taken solace in a four-letter word: </span><a href="https://www.9news.com.au/world/taco-donald-trump-always-chickens-out-greenland-retreat-back-down/7b017a28-6b64-4624-9ae6-c4f636559f67" rel="" target="" title="TACO"><span>TACO</span></a><span>.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The acronym, short for </span><a href="https://www.9news.com.au/world/taco-donald-trump-always-chickens-out-greenland-retreat-back-down/7b017a28-6b64-4624-9ae6-c4f636559f67" rel="" target="" title="Trump Always Chickens Out"><span>Trump Always Chickens Out</span></a><span>, is based on the idea that the president will back down from his worst impulses once he sees the stock market response.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Donald Trump tends to see the share markets as a barometer of his success," AMP economist My Bui said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Donald Trump actually backed out last year to appease the voters a little bit by getting rid of tariffs on furniture and cocoa, beef and bananas."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>But said traders were buying and selling on the assumption Trump would back out of his war in Iran.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>When markets opened after Trump began his war in </span><a href="https://www.9news.com.au/iran" rel="" target="" title="Iran"><span>Iran</span></a><span>, it was a bloodbath.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The ASX </span><a href="https://www.9news.com.au/finance/australia-asx-fall-us-iran-conflict-oil/683dd1fc-6f60-4295-819a-4e1e87ecaab3" rel="" target="" title="lost $90 billion in a day"><span>lost $90 billion in a day</span></a><span>. Wall Street lost $1.1 trillion.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Trump has been sending mixed messages in the meantime on the duration of the war, claiming simultaneously it was nearly over or with much worse to come.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/world/joe-rogan-donald-trump-iran-insane-betrayed-usa-news/749817fd-6b65-4363-aa45-e78fdd01762a"><strong><span>Joe Rogan pans Donald Trump's 'insane' actions in Iran</span></strong></a><span></span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>But this war with Iran does not give him an easy option to "chicken out".</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"He has always had an off-ramp," Eslake said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"And most of the time when there's been an adverse market reaction to something stupid he has said or done, he takes the off-ramp.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"But it's not obvious that there's an off-ramp here."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Peace with Iran appears a difficult proposition. The US attacked the country during its negotiations, which should make it less likely to willingly enter ceasefire talks.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>And the </span><a href="https://www.9news.com.au/world/mojtaba-khamenei-son-of-irans-supreme-leader-has-been-named-his-successor-iranian-state-tv-says/2af18a14-e341-4b8d-9e30-e3382d346e47" rel="" target="" title="new supreme leader may be unwilling to back down"><span>new supreme leader may be unwilling to back down</span></a><span> after air strikes killed his father, mother, wife, sister and son.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>For the US, simply pulling out of the region won't guarantee the Iranian regime won't use its weapons to stop shipping traffic in the Straits of Hormuz.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/world/donald-trump-sexual-assault-allegations-13-year-old-teen-girl-jeffrey-epstein-files/3a3a5fee-6dc6-4fde-89fc-0f28762b9c46" target="" title=""><strong><span>Epstein files involving uncorroborated claim about Trump published</span></strong></a><span></span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><em><strong><span>NEVER MISS A STORY: Get your breaking news and exclusive stories first by following us across all platforms.</span></strong></em></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><ul><li><em><strong><span>Download the 9NEWS App here via</span></strong></em><span> </span><a href="https://apps.apple.com/au/app/9news/id1010533727" target="" title=""><em><strong><span>Apple</span></strong></em></a><span> </span><em><strong><span>and</span></strong></em><span> </span><a href="https://play.google.com/store/apps/details?id=nineNewsAlerts.nine.com&amp;hl=en_AU&amp;pli=1" target="" title=""><em><strong><span>Google Play</span></strong></em></a></li><li><em><strong><span>Make 9News your preferred source on Google by</span></strong></em><span> </span><a href="https://9.nine.com.au/8x987w" target="" title=""><em><strong><span>ticking this box here</span></strong></em></a></li><li><em><strong><span>Sign up to</span></strong></em><span> </span><a href="https://login.nine.com.au/edm?client_id=nineatnine" target="" title=""><em><strong><span>our breaking newsletter here</span></strong></em></a></li></ul></div></div>