The Donald Trump Uncertainty Index

Economic policy uncertainty: Since 2005 there have been three times of high uncertainty in regard to economic policy:

1. A long period of abnormally high uncertainty during the financial crisis of 2007-08 and the so-called "Great Recession" of 2008-09, and until 2013 when uncertainty finally began to decline;
   
   
2. A shorter but extremely high period of policy uncertainty arising from the pandemic of 2020; and
   
   
3. A sudden rapid increase, from a low of 97.3 in October 2024 to near the 160 level (in November & December 2024 and January 2025) and then to the most recent (February 2025) level of almost 240 -- in all a sharp, rapid reaction to the November election.
   
   

The Economic Policy Uncertainty (EPU) Index since 2005

 

The Economic Policy Uncertainty Index since 1985:

https://fred.stlouisfed.org/series/USEPUINDXM

The jagged blue line indicates economic policy uncertainty. The Uncertainty Index appears to go high at times of recession. In addition there are a couple highs in the 1980s during the Savings and Loan Crisis, and the long-running high following the Great Recession, noted above.

 I added vertical dash-dot lines indicating November 1 of Presidential Election years:

• 1988: George H. W. Bush
• 1992: Bill Clinton
• 2000: George W. Bush
• 2008: Barack Obama 
• 2016: Donald Trump
• 2020: Joe Biden
• 2024: Donald Trump

None of these election-date indicators occur at  moments of sudden increase in the Uncertainty Index unless there is also a recession around the same time. None of them, that is, until the 2024 election of Donald Trump.

In the months since the Trump victory, the Economic Policy Uncertainty Index suddenly spiked upward, nearly reaching the 240 level in February, the third highest point on the graph after the pandemic-related cluster and the August 2011 high. The reaction was immediate, beginning in the month of the election.

An interesting statistic, given the current political environment.

 

For a bigger graph, click the graph image above. For an even better view, click the link below the graph to see it at FRED.

The Fred page links to an info page identifying three types of data used to create the index: news coverage, disagreement among economic forecasts, and, interestingly, "tax code expiration data".

FRED also links to the EPU home page, which displays a large selection of policy uncertainty graphs, including a global measure.

In addition, FRED links to Measuring Economic Policy Uncertainty, a 75-page PDF by Scott R. Baker, Nicholas Bloom, and Steven J. Davis.