Nacho versus Taco: Are these Tex-Mex themes about to give investors in Singapore indigestion?

[SINGAPORE] When global bond yields suddenly began surging on May 15, it felt as though investors were finally giving up on “looking through” the inflationary impact of the war in Iran, and positioning themselves for tighter monetary policy from the US Federal Reserve and other major central banks.

Then, almost on cue, US President Donald Trump said that he had authorised a new wave of attacks on Iran, but called them off in order to facilitate peace negotiations. Iran subsequently said it was reviewing a new proposal from the US.

Since returning to office last year, Trump has repeatedly walked back his harshest economic and military threats in the face of financial market pressure – a pattern of behaviour that has come to be associated with the acronym Taco, which stands for Trump always chickens out.