The US Economic Policy Uncertainty Index is the highest it’s ever been — pandemic excluded

We’ve all heard a lot about how much “uncertainty” the Trump tariff announcements, reversals, and re-announcements have been creating, but how can we actually quantify what’s been happening?

Looking at the market reaction, which — until today — has mostly presented itself as a momentum reversal that’s hit tech stocks hardest, is one way. Other ways would be to check the VIX, a measure of the expected 30-day volatility for the SPDR S&P 500 ETF, or to look at what economists are forecasting, with Goldman Sachs’ chief economist cutting his US GDP forecasts yesterday from 2.4% to 1.7% for this year. An additional measure that’s helpful to check in with is the Economic Policy Uncertainty Index, a series of indexes created by researchers from Northwestern, Stanford, and the University of Chicago, to quantify based on mentions of words like “economic uncertainty.”

Using the daily measure of that index, and then taking a seven-day rolling average, reveals that the index has only ever been more elevated during the pandemic — when Covid dropped us all into truly unprecedented times.