Are Markets Getting Suckered By Trump's Truth Socials? | Diving In

What happens when markets have to price the risks of war and presidential credibility at the same time? In this episode, Justin Wolfers explains why U.S. stocks keep rising and falling with Trump’s Truth Social posts, despite their questionable truthfulness. The core point: even if investors discount what the president says, they continue to react because the stakes are so large.

And the repeated claims that peace is just around the corner create a deeper problem. If investors come to treat presidential statements as noise rather than signal, markets may respond less than they otherwise would. That matters because Wall Street can act as a feedback mechanism, warning policymakers when a decision is economically dangerous. If that feedback loop weakens, bad policy is likely to last much longer.

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