28 March 2025
So, are base rates always the right indicators? I’d forecast 50-50 and I mean that literally. 🙂
Here’s what happened. I made two forecasts on the following questions:
Armed with historical data, I thought I was being clever. I pulled up market reactions to Trump’s tariff announcements back in 2018–19. For each event, I checked how the S&P 500 and 10-year yields moved from the day before to the day after. My thinking? Those events were analogous of course! So I used those as my base rates. Based on that, I made my two calls.
I went through the following wikipedia article to collect the information.
One right. One wrong. 50-50. I fell into a classic trap: Good data, wrong analogy.
The scale of these tariffs was unprecedented and turns out my pre mortem in this case turned out to be true!
My Pre-Mortem:
I am not sure if this list of tariff announcements and implementations is comprehensive. I did Ctrl+F on the wikipedia page for each month and noted down the dates as I went along. And then gave that list to ChatGPT to make it comprehensive by using the 'Search' functionality. And then I used the updated dictionary in my code directly. :)
Also the liberation day tariffs seem unprecedented. So, base rates may not be the best bet.
My original rationale on GJ Open: https://www.gjopen.com/comments/1970713
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