President Trump puts ‘I did it’ sticker on gas pump, could be a call back to Biden
When gas prices hit record highs under the Biden administration, stickers with his photo and the words “I did it” were placed on gas pumps. Now they have Trump’s face.
Wall Street sold on March 27 as oil prices soared and the Iran war continued with no end in sight.
Two of the major U.S. indexes are currently in correction territory, defined as a decline of 10% or more from recent highs. The Dow Jones Industrial Average fell nearly 800 points, ending the day down 1.7% and 10% off its recent high. The Nasdaq Composite Index ended 2.15% lower, down more than 11% from its high in October last year. The S&P 500 closed 1.6% lower.
Meanwhile, 10-year U.S. Treasuries rose 2 basis points to about 4.44%. This is below the previous high of 4.48%, but shows that fixed income assets have a tough road ahead in an environment of still high inflation.
Investors are selling bonds, which provide a fixed source of income but are losing value as the Iran war raises prices for everything from energy to food. Bond prices move in the opposite direction to yields. That was on display on March 26, when the U.S. government had to raise the yield on its seven-year bond to attract cautious buyers.
Rising bond yields ripple through all types of credit markets, driving up prices for everything from mortgages to small business loans. Many analysts are comparing the current period to the 1970s, as the oil shock is expected to lead to high inflation and a cooling economy.
“There are ways for the economy to cope with short-term disruptions, including leveraging consumer savings and inventories,” Don Rismiller, chief economist at Strategas, said in a March 27 note.
Rissmiller said he is “concerned” now that the war is dragging on.
The Trump administration has become known for what some analysts call a “TACO” approach to policy. This is an abbreviation for “Trump Always Chickens Out.” The White House has proposed several policies in the past and then reversed them if markets didn’t respond well. Last April, for example, it proposed sweeping new tariffs.
One analyst team thinks this freakout was not as strong. Nicholas Colas, co-founder of Datatrek Research, wrote on March 27 that the market has not yet reached the point where policymakers decide to intervene to support asset prices.
“In the United States, oil prices and the CBOE Volatility (VIX) index have long been proven to trigger policy changes,” Collas wrote. “U.S. stocks remain under pressure because neither is yet close to the levels before the change occurred.”
In the past, he said, oil prices would have to double before a policy change would occur, with the VIX index, also known as Wall Street’s “fear index,” ending above 35 or 43.
On Friday, the price of a barrel of Brent crude oil was about 62% above its pre-war high. The VIX index surged more than 14% during the day to just above 31.
