Way back last month, JPMorgan described three types of US economic exceptionalism: “Good,” “bad” and “ugly.”

I talked at some length about each in the Weekly dated February 8 (reach out if you want a resend), but the crucial point is that “ugly” US exceptionalism looks like max tariffs and an “extreme” version of Trumpian economic nationalism.

In such a scenario — and assuming it persisted for long enough to matter — both the US and the world could suffer a trade-related growth shock. That wasn’t JPMorgan’s base case, but in a new note, the bank cautioned that recent developments suggest the risks are indeed “drifting toward ‘ugly’ US exceptionalism with US extreme policies undermining confidence and sentiment.”

There’s that word again: “Extreme.” Although I don’t have data to back this up, it feels like that adjective’s being employed with increasing frequency to describe the Trump’s administration’s early policy bent.

Although JPMorgan’s cross-asset strategy team retained their year-end S&P target of 6,500 (for now), the bank turned “tactically cautious on risk assets” this week, citing a deteriorating US growth outlook as well as “weak business sentiment and trade uncertainty.”

I’ve implicitly patted myself on the back lately for flagging an imminent turn in US equity exceptionalism on February 4. In that linked article, I cited the ratio of the MSCI USA index to the MSCI World gauge excluding US shares, which had recently gone vertical. Here’s what that ratio did last week:

If you’re keeping score at home, that’s among the largest one-week underperformances for US stocks versus global shares on record. In fact, US shares have underperformed for seven weeks in a row, eight in nine and nine in 11.

In the note mentioned above, JPMorgan alluded to the notion that the Trump administration has a plan. Or “a concept of a plan,” as Trump put it, while debating Kamala Harris.

“The tension between the negative supply shock of even more extreme pro-US protectionist and less market-friendly policies (tariffs, immigration and DOGE) and the positive impact from tax cuts, deregulation and invigorated business confidence [recently] tilted to the negative side,” JPMorgan said, adding that “we see risk of more backloading of the pro-growth agenda to make the administration better positioned for the 2026 US midterms.”

There you go. That’s the plan, allegedly: Trump’s just trying to get the bad stuff — the “disruption,” as he called it last week — out of the way now, so the onset of a new American “golden age” lines up with the midterms.

Whatever the case, JPMorgan expects “elevated volatility” in the near-term, but reckons any material drawdown might be worth buying. “We believe the feedback loop from extreme policies into the market could turn tactical weakness into [a] strategic opportunity to buy the dip,” the bank said, before striking a cautious tone. “For that to take place, we need to clear more headlines on the less market-friendly policies.”