"Been down so long it looks like up to me" -- a tale told mostly in tweets*

Market Psychology in 2025

"I'm going to lob a half dozen grenades into that building!"

Everyone runs out, screaming and trampling each other.

[Consults with advisors]

"Maybe I'll just lob three grenades into the building."

Everybody runs back in, singing and dancing.

 

Do traders have Stockholm Syndrome? Rally today appears based on WSJ report that we might have "only" 50-65% tariff on Chinese goods. That's still a huge effing tariff - roughly triple the average effective tariff rate on China last year. US companies still don't have margins to absorb this

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— Catherine Rampell (@crampell.bsky.social) April 23, 2025 at 7:26 AM

Yes, and the markets are believing it without any evidence. My money says there'll be some 'deal' announced, very light on details and with none of the critical issues addressed.

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— Kai Ryssdal (@kairyssdal.bsky.social) April 22, 2025 at 10:34 AM

We’ve talked about this before. Despite what you’ve heard, the current stock market loves uncertainty—probably because it contains at least the possibility of good news, and traders really want to hear some of that. As far as I can tell (keeping in mind that I am no expert on the financial system in general, and bonds in particular), bond traders remain more traditionally hard-headed in this respect.

“.. One reason for caution is that Bessent didn’t say any negotiations were in the works or even planned.” 🤡 @barrons.com www.barrons.com/articles/tru...

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— Carl Quintanilla (@carlquintanilla.bsky.social) April 23, 2025 at 8:19 AM

Unclear why market participants are so responsive to small comments like this, when even Trump's Cabinet members do not appear to know what their boss will do from minute to minute on tariffs. www.ft.com/content/780c...

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— Catherine Rampell (@crampell.bsky.social) April 22, 2025 at 12:33 PM

Huge surges are sparked by vague, noncommittal statements from a secretary who is currently in a power struggle with Musk and Loomer and who may not outlast those unsustainable tariffs.

While on the subject of uncertainty, you have to wonder how the markets would react under some other administration if the Secretary of the Treasury—who was seen as one of the primary sources of stability in the economy—were to get into a shouting match in broad daylight at the White House with the second (second?) most powerful man in the country.

“It was two billionaire, middle-aged men thinking it was WWE in the hall of the West Wing," one witness said .. “.. the president saw it, and then they carried it down the hall, and that's when they did it again ..” “.. It was loud. And I mean, loud." @axios.com www.axios.com/2025/04/23/m...

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— Carl Quintanilla (@carlquintanilla.bsky.social) April 23, 2025 at 10:58 AM

Putting aside the fact that these new “moderate” tariffs are still sky-high, there is no reason to believe that Trump won’t return to his more extreme position. For starters, Trump and many of his advisors deeply believe in the wisdom of tariffs, though their rationales may differ and even contradict each other.

Trump: "In 1913 they traded to the income tax system. We used to be all tariff. And we had no income tax and we had the wealthiest country we ever had proportionately from about 1870 to 1913. We had more money than anybody."

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— Aaron Rupar (@atrupar.com) April 23, 2025 at 8:11 AM

for the second time today, Trump goes on a bizarre (and false) rant about how tariffs made the country the richest it ever has been between 1870 and 1913

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— Aaron Rupar (@atrupar.com) April 23, 2025 at 2:42 PM

Trump’s ego—and his favorite negotiating strategy—both depend on maintaining a perception of dominance. It is difficult to imagine the general reaction to this new position not getting under his skin.

oh dear man just walked into principal Xi's office and asked for a spanking www.wsj.com/politics/pol...

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— Josh Marshall (@joshtpm.bsky.social) April 23, 2025 at 1:55 PM

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— Mike Luckovich (@mluckovich.bsky.social) April 23, 2025 at 8:20 AM

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— Ivan the K ™☑️ (@ivanthek.bsky.social) April 23, 2025 at 6:41 AM

It is worth mentioning that even if Powell’s job is secure through the end of his term—something I’m not sure we should necessarily assume—Trump is continuing to interfere with and attempt to intimidate the Fed on a level that, in normal times, would cause an outcry and a substantial reaction from the markets.

“Trump seems to want all the significant sources of authority to bend to his whims: courts, elite universities, foreigners—both friend and foe. It strikes me as quite unlikely that the Fed will ultimately escape this,” said Jon Faust, a former senior adviser to Powell. www.wsj.com/economy/cent...

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— Nick Timiraos (@nicktimiraos.bsky.social) April 23, 2025 at 5:14 PM

"May defend"

Sure would be helpful if GOP lawmakers said these things publicly, on the record. Cowards. thehill.com/homenews/sen...

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— Catherine Rampell (@crampell.bsky.social) April 23, 2025 at 7:11 AM

Even if we take the tariffs and the firing of Powell off the table, there’s still plenty of bad news to go around.

Freight going through some things. #SummerOfScarcity 🇺🇸

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— Carl Quintanilla (@carlquintanilla.bsky.social) April 23, 2025 at 7:43 AM

Remember when Treasury Secretary Bessent promised 3% GDP growth (slightly more modest that Trump’s crazy promise or 5%)? New IMF forecasts out, ratcheting down growth due to Trump trade wars. www.wsj.com/economy/glob...

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— Catherine Rampell (@crampell.bsky.social) April 22, 2025 at 6:42 AM

US Equities "Going Through Some Things": Capital Flight Accelerates Under Trump Regime www.reuters.com/business/fin...

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— Ape Shit News (@apeshitnews.bsky.social) April 15, 2025 at 12:33 AM

“.. judging only from price action, we are suddenly witnessing a comprehensive turn away from US assets (stocks, USTs, corporate credit and the dollar). this is the single most important theme to monitor over coming weeks. .. for the moment capital is flowing out of the US.” - GS Desk/Pasquariello

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— Carl Quintanilla (@carlquintanilla.bsky.social) April 13, 2025 at 3:27 PM

For instance, I don't think it's crazy to imagine Trump defaulting on the debt by accident or in a fit of pique. www.offmessage.net/p/trump-cour...

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— Brian Beutler (@brianbeutler.bsky.social) April 22, 2025 at 8:23 AM

* Technically not "tweets" but you know what I mean.