If you were wondering how Charlie McElligott celebrated “Liberation Day,” the answer is that he spent it in the Bahamas swimming with pigs.

As he was keen to point out Monday, that’s “a real thing.” I can confirm. Not because I’ve done it personally, but because when you Google “Bahamas, swimming with pigs,” you get… well, information on swimming with pigs in the Bahamas. There’s even an official website where you can book a trip, and I gotta tell you: It looks awesome.

Anyway, McElligott didn’t mince words about the USTR “equation” debacle, calling it a “2nd grade math attempt,” “sand in the gears of global growth” and a broadside which “fattens the left-tail for a recession and/or a market accident.”

The C-suite and consumers, he wrote, now have little “choice but to pull back on spending,” which in turn “ripples through the economic ecosystem” and, absent a circuit breaker, could ultimately manifest as “large job losses which likely then confirm the worst-case recession.”

What about that circuit breaker? Is there one? Well, maybe, maybe not. Markets being markets, traders are hoping central banks will rescue them from “Tariff Man.” Bets on Fed easing have obviously escalated. At the STIR highs Monday morning, traders had priced in nearly half a dozen Fed cuts for 2025 (~140bps).

“Markets are clearly voting ‘policy error’ with their feet,” McElligott wrote. By that he means the rapid pricing-in of additional easing isn’t just an S.O.S. from markets, but also a signal from traders to Jerome Powell, Andrew Bailey, etc., that downside risks to growth should now outweigh upside risks to inflation in the policy calculus. Failing to appreciate that, markets are implicitly suggesting, will only result in even larger rate cuts later.

In the event Fed officials stick to anything that comes across as an unduly obstinate message — and there are several Fed officials with scheduled speaking engagements this week — they risk “more ‘tantrum’ selling of risk assets [and] even more aggressive bond-buying and cut–pricing, in a vicious feedback loop that will ultimately self-fulfill,” Charlie added.

As for Trump — who he called “The Human VVIX” — McElligott stated the obvious, which is just that as long as Howard Lutnick and Peter Navarro continue to pound the war drums and as long as “Tariff Man” insists not so much on reciprocity, but rather on actually eliminating trade deficits (a goal which, when you’re talking about countries like Vietnam, is “absurd,” to quote JonesTrading’s Mike O’Rourke), risk sentiment’s likely to stay fragile.

Personally, I don’t think Trump has the fortitude for this, and I don’t think his position’s principled enough to be “sticky” in the face of a grinding bear market, let alone a snowballing crash.

Bill Ackman spent the weekend virtually pleading for Trump to delay the tariffs, and on Monday, McElligott mentioned Bill’s social media messages as a kind of template for what might compel Trump to dial it back. A “further sharp liquidation of US equities longs and the negative wealth effect on wallets [could] build pressure on the administration” to announce a “goodwill pause,” citing ongoing negotiations with dozens of America’s trading partners, he said.

The new tariffs go into effect on Wednesday, so there’s a 48-hour window for that. Plainly, any such “pause” would spark a big rally. If you ask Charlie, it could well elicit a session or two of “limit up.” But, he went on, such a “policy change outcome is extremely low delta in the immediate future, and would only likely occur after multiple additional weeks of ~-10% equities losses.”

After all, McElligott remarked, Trump thinks he has a mandate to “disrupt [the] Pax Americana status quo norms across policies and institutions, particularly as it relates to perceived grievances with the concept of deficits  — errr — global trade.”