Signum Global Advisors Formula Forecasts Trump Policy Pivot on Iran

But ahead of an uneasy truce settling over the Persian Gulf region, geopolitical-risk consultancy Signum Global Advisors decided to let mathematics do the talking, according to reporting published by MarketWatch.

The Mathematical Formula Behind the TACO Trade

The term TACO—an acronym for Trump always chickens cut—developed as a trope in the markets in 2025, after a series of high-profile episodes of brinksmanship from Trump, most notably surrounding the imposition and then deferment of his “liberation day” tariffs. To predict when President Donald Trump might back down from a fight, analysts at Signum Global Advisors constructed a quantitative model.

Led by Andrew Bishop, global head of policy research at Signum, the firm’s analysts built a formula incorporating specific financial and logistical variables to ascertain the likelihood of a Trump de-escalation.

• The market price of Brent crude oil (BRN00)
• The S&P 500 SPX
• U.S. 10-year Treasury yields BX:TMUBMUSD10Y
• The number of crossings through the Strait of Hormuz

Analysts evaluated the administration’s sensitivity to these financial stress points taking March 7 as a starting point, a week after the U.S. and Israel first attacked Iran. By tracking previous pivots—such as a pivot to ceasefire negotiations on March 22, an acceptance of one on April 7, and a decision to focus on a memorandum of understanding on May 18—the consultancy calculated the results: it takes a 2.3 to 3.4 standard deviation move for Trump to act, or an average of 2.9 standard deviations.

How the July Ceasefire Forecast Unfolded

Last week, pressure mounted on the White House as Brent topped $100; the S&P 500 tracked lower; and, most alarmingly, the real yield on the U.S. 30-year BX:TMUBMUSD30Y, or long, bond reached 3%. For a notoriously market-sensitive president like Trump, the implications for the midterm elections in November were inauspicious, and it now appears he has bowed to the dictates of risk assets and taken a step backward.

In an update to previous analysis for clients sent out Sunday, Signum noted that on Wednesday the index had broken through the previous precedents for a TACO on March 22, May 18 and June 11, and the risk consultancy observed that, according to Axios, Trump's mindset began to change on Thursday evening. Extrapolating linearly suggested that a TACO could happen as early as July 22 and “should” happen no later than July 30 (unless conditions materially improve, which seemed unlikely), with history suggesting July 26 as most likely. Events verified the projection: hostilities were paused this weekend, and an uneasy truce looks in recent days to have settled over the Persian Gulf region, suggesting Signum’s theories had been borne out and validated by events.

Market Rebound and the Path Forward

As a consequence of the reversal in the U.S. bombing campaign on Iran, oil prices (BRN00) have plummeted 10%, U.S. Treasury yields have declined, and stock-market futures (ES00) have rallied ahead of Monday’s opening on Wall Street.

Looking ahead, Signum’s Andrew Bishop’s base case remains that a face-saving compromise will be achieved by the U.S. and Iran. Bishop, global head of policy research at Signum, predicts the tacit agreement may allow the U.S. to claim that Iran will (a.) not shoot at any ships (emphasis his) and (b.) not levy any tolls, while, however, allowing Iran to create a consequential precedent of visibility and management of Hormuz shipping flows.