Oil prices “tame” Trump? Wall Street discovers a pattern: Whenever it hits $100, it gets “TACO.”

As the Iran war triggers violent fluctuations in the oil market, Wall Street is racing to crack a new rule: whenever US crude oil prices approach $95 to $100 per barrel, the Trump administration switches to "cooling mode," while when prices fall, tough rhetoric quickly makes a comeback.

Since Trump launched war in the Middle East, Brent crude oil surged above $119 per barrel on March 9, followed by weeks of wild swings. US gasoline prices have risen more than a third compared to pre-war levels, approaching $4 per gallon; diesel prices have broken $5 per gallon. Rising energy prices are pushing up inflation expectations—US 10-year Treasury yields have climbed about 0.4 percentage points this month, marking their worst single-month performance since the end of 2024, rising to a near 12-month high, and market expectations for a Fed rate cut this year have shrunk significantly.

Just over the past week, the White House has sent out a series of contradictory signals: threatening to use the Strategic Petroleum Reserve, deploying elite 82nd Airborne Division troops to the Middle East, and vowing to "destroy" Iranian power facilities; meanwhile, it has also hinted at smooth progress in peace talks with Iranian officials. Mike O'Rourke, a broker at Jones Trading in New York, said bluntly: "Now there are too many contradictory headlines bouncing back and forth between escalation and de-escalation. We've entered the realm of fiction."

In response, White House spokesperson Taylor Rogers denied this, saying, "President Trump has always maintained full transparency with the American people regarding these temporary short-term disturbances. He is focused on doing what's right—eliminating the threat posed by the Iranian terror regime to America and its allies." However, according to several traders, although the actual supply shock is enough to support higher oil prices, few dare to act against Trump's social media posts and TV interviews.

Oil Prices: Politically Sensitive Invisible Ceiling

Observers have noted that since the outbreak of war, Trump's behavioral patterns have become increasingly clear: tough rhetoric often emerges over weekends when oil markets are closed, while peaceful signals appear as oil prices rise.

According to a senior energy trader, he has observed a distinct pattern: whenever US crude prices (currently about $10 lower than Brent) approach $95 to $100 a barrel, the White House’s cooling statements ramp up, and market expectations of possible government intervention rise. So far, this "verbal suppression" has effectively capped price increases. But he also warns that once a physical shortage emerges, prices may surge dramatically.

Onyx Capital Group oil market analyst Jorge Montepeque attributes this to a battle between two forces: "It's obvious—he (Trump) fears high oil prices… Gasoline above $4 a gallon is politically fatal. But on the other hand, his self-consciousness won’t allow him to appear like a loser." With only a few months left before the midterm elections, gasoline prices have become one of the most direct pain points for voters.

Wall Street Tracks the Next "TACO Moment"

Predicting the next "TACO moment" has become Wall Street’s hottest topic.

"TACO" stands for "Trump Always Chickens Out"—originally from Trump’s frequent flip-flops on tariff policies last year. Now, investors cite this in the context of the Iran war, to describe his potential policy reversals.

Towards this end, Maximilian Uleer, Deutsche Bank’s cross-asset strategy chief, built a "Stress Index" this week—an indicator for measuring the likelihood of "US government rhetorical or strategic shifts." The index considers four factors: monthly changes in Trump's approval rating, one-year inflation expectations, S&P 500 performance, and US Treasury yield.

Uleer says: "If the index rises, the probability of a government policy shift goes up. If all four pain points worsen simultaneously, the motivation for adjustment becomes very strong." Currently, the index has approached its highest level since Trump returned to the White House.

Treasury Yields: Another Red Line

Besides oil prices, Treasury yields are also a trigger point closely watched by the Trump administration.

Monica Defend, head of Amundi Investment Institute, says Trump has become "much more sensitive" to yields in his second term. "Whenever the 10-year Treasury yield approaches 4.5%, the government gets really nervous—and that's usually when they act. As an investor, you need to anticipate this," she said.

The 10-year US Treasury yield is considered the benchmark for government funding costs. As oil prices drive up inflation expectations, yields have now reached near a 12-month high, providing an important indicator for tracking White House policy moves.

Facing an unpredictable situation, many investors have chosen to wait and see.

"We’re all doing the same thing—nothing," said a North American hedge fund chief investment officer. "You can’t short oil because prices could jump to $150 anytime. But the war could also end in five minutes."

Some investors have chosen to wait out the storm, their biggest concern being: once they rush into a position, they might be caught off guard by Trump's next Truth Social post.

Risk warning and disclaimerThe market has risks, and investments require caution. This article does not constitute personal investment advice, nor does it take into account the individual user's specific investment goals, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investments based on this article are at your own risk.