- Ghalibaf advised traders to adopt an inverse strategy to Trump’s pre-market announcements regarding energy market movements.
- The widely adopted “TACO” trade strategy on Wall Street proved ineffective following the extension of Trump’s deadline concerning Iran.
- The yield on the 10-year Treasury note is approaching the 4.5% mark, increasing pressure on the White House to implement countermeasures.
Iran’s Parliament Speaker, Mohammad Bagher Ghalibaf, disseminated what appeared to be trading recommendations via the social platform X (formerly Twitter), characterizing President Trump’s pre-market statements as a “reverse indicator” and advising his audience to take positions contrary to any energy market shifts prompted by such announcements.
This statement introduced a peculiar dimension to a week characterized by the failure of a prevalent Wall Street trading strategy, known as the TACO trade, under the strain of significant geopolitical risks.
The TACO Trade Hits a Wall
The “Trump Always Chickens Out” (TACO) trade strategy significantly influenced market behavior throughout 2025. This approach involved investors buying assets on dips triggered by Trump’s pronouncements, anticipating a rapid market reversal. This playbook had consistently yielded positive results during tariff disputes involving China, Canada, and the European Union.
However, this strategy faltered last week when Trump extended the deadline for potential strikes on Iranian energy infrastructure from March 27 to April 6. Contrary to expectations, the anticipated market recovery did not materialize.
Some observations:
The TACO trade is dead. The algos rigged up to that are being killed. The market no longer believes Trump’s lies.
You are starting to see real world stories across Asia and Australia about oil shortages, fuel rationing, and shutdowns, which is adding to the…
— Aylo (@alpha_pls) March 27, 2026
Emmanuel Cau, a strategist at Barclays, observed that the repeated policy reversals were eroding investor confidence. Market participants began interpreting delays not as steps toward de-escalation but as strategic postponements preceding heightened conflict.
The Atlanta Fed’s GDPNow model significantly downgraded its forecast for first-quarter economic growth, projecting a 2% increase, a notable decrease from the 3.1% estimated just one month prior.
Concurrently, data from the CME FedWatch tool indicates that financial markets are pricing in a scenario where interest rates remain unchanged through late 2026, with only a minimal probability of any rate adjustments.
This outlook contrasts sharply with the multiple interest rate cuts that investors had anticipated at the beginning of the year.
Ghalibaf and the Bond Market Warning
Ghalibaf, a former commander in the Islamic Revolutionary Guard Corps (IRGC) who has become a prominent political figure during the conflict, went beyond merely dismissing the possibility of U.S. negotiations.
He advised his followers that Trump’s pre-market communications could serve as signals for profit-taking opportunities.
“Pre-market so-called ‘news’ or ‘Truth’ is often just a setup for profit-taking. Basically, it’s a reverse indicator. Do the opposite,” wrote Ghalibaf.
In a separate development, economist Steve Hanke of Johns Hopkins University stated that bond market participants had shifted against Trump due to the combined pressures of the trade war and the conflict with Iran.
AS A RESULT OF TRUMP’S TARIFF WAR AND THE US-ISRAELI WAR ON IRAN, THE BOND VIGILANTES HAVE TURNED ON TRUMP.https://t.co/1PyUM3mDoa
— Steve Hanke (@steve_hanke) March 29, 2026
The yield on the U.S. 10-year Treasury note has risen to 4.46%, nearing the critical 4.5% level that previously prompted Trump to suspend reciprocal tariffs in April 2025.
Earlier in the week, Ghalibaf had also issued a warning, designating financial institutions purchasing U.S. Treasury bonds as legitimate military targets.
This declaration introduced a direct geopolitical risk element to the existing fiscal concerns impacting the bond market.
Why the Old Playbook No Longer Applies
The TACO strategy’s success was predicated on the assumption that Trump’s trade adversaries were rational economic actors. Nations such as China, the European Union, and Canada prioritized stability and were amenable to face-saving compromises.
Iran, however, does not operate under such dynamics. Its supreme leader was reportedly killed in the initial military actions.
JUST IN: Iranian state television has announced that Supreme Leader Ayatollah Ali Khamenei was killed in the Israeli and US airstrikes on Saturday.
— BeInCrypto (@beincrypto) March 1, 2026
Its military infrastructure has sustained repeated attacks, yet Tehran has not indicated any inclination toward negotiations. Ghalibaf himself accused Washington on Sunday of planning a ground invasion while simultaneously signaling publicly that discussions were progressing.
With Brent crude oil prices exceeding $110 per barrel and the Strait of Hormuz remaining effectively impassable, the economic repercussions of the conflict are already reflected in current market prices.
Investors who relied on the TACO strategy for dip-buying now confront a market where the geopolitical risk premium is not merely a transient spike but a fundamental characteristic.
The key question as the following week commences is whether the breach of the 4.5% threshold for the 10-year Treasury yield will compel the White House to intervene, mirroring its actions during last year’s tariff crisis, or if an actual military conflict will prove more intractable to resolve than a trade dispute.
Source: : beincrypto.com