When Trump Jawbones the Market, Bet Against Him at Your Peril [View all]
The oil market unfolded in a familiar way last Monday. The day began with reports that Iran had stopped talking to the U.S. through mediators, sending oil up $3 a barrel.
Then that afternoon, President Trump posted on social media that Israel was pulling back in Lebanon, and Hezbollah had agreed to stop shooting. Oil dropped $1. Less than 15 minutes later, Trump posted that talks with Iran were proceeding at a “rapid pace.” Oil fell an additional 50 cents.
By week’s end, Hezbollah and Israel were still exchanging fire, and talks with Iran had yielded no agreement. Still, the episode reinforced a pattern in place throughout the war. Through verbal interventions, Trump has repeatedly taken the steam out of oil prices—not by restoring oil flows but by inflicting losses on those betting he won’t.
It’s not just oil. Trump and his officials have pushed around stocks, interest rates, foreign exchange and mortgages. They don’t
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Trump and his officials are more obsessed with markets and willing to steer them. Treasury, at the direction of Secretary Scott Bessent, a former hedge-fund manager, bought pesos to support Argentine President Javier Milei ahead of a crucial legislative election last year. In January, it signaled it might buy yen, then under severe downward pressure. Both currencies rallied.
Last January, Trump ordered Fannie Mae and Freddie Mac to buy $200 billion of mortgage-backed securities in a bid to lower mortgage rates. Yields on the securities promptly dropped a 10th of a percentage point.
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