Trump regularly bragged about the market’s performance during his first term in office. Stocks initially soared after his election victory amid enthusiasm his administration would focus on business-friendly priorities like renewed tax cuts and deregulation, rather than aspects of his agenda deemed less appealing to investors. However, Treasury Secretary Scott Bessent rejected that notion as the president’s on-again, off-again tariff threats rattled markets, with Trump himself refusing to rule out a recession.

“There’s no put,” Bessent told CNBC earlier this month. “The Trump call on the upside is, if we have good policies, then the markets will go up.”

Purchasing a “put” option contract gives an investor the right to sell an underlying security at a predetermined price, known as the strike price, and, therefore, can be used as an instrument to hedge against downside risk. Meanwhile, simply buying a call option, or the right to purchase the asset at the strike price, is a bullish bet on the security’s value increasing. 

To be clear, the idea of a “Trump put” refers to a general commitment from the president to step in if share prices fall dramatically, not any mechanical trading action. The White House has pushed back on that idea and disputed reports that the Apr. 2 tariffs are being “narrowed.”

“The only special interest that President Trump cares about is the interest of the American people,” White House spokesman Kush Desai said in a statement to Fortune. “Every member of this administration is committed to delivering on President Trump’s mandate to restore American Greatness by implementing an America First economic agenda of tariffs, deregulation, and the unleashing of American energy.” 

The origins of the ‘Fed put’

Over two decades ago, market watchers and journalists coined a similar phrase referring to the Federal Reserve and Alan Greenspan, who served as chair of the central bank from 1987 to 2006. At the beginning of his tenure, the Fed cut rates shortly after the “Black Monday” crash in October 1987, which provoked fears of a credit crunch. The notion of a so-called Greenspan put grew after arguably similar episodes in 1998 and January 2001. 

Bank of America credit strategists Yuri Seliger and Jean-Tiago Hamm believe America’s central bank remains primed to step in if stocks plummet. While the Fed held rates steady at its March meeting, the Federal Open Market Committee said in a statement that it was closely monitoring “uncertainty around the economic outlook,” with policymakers still penciling in two interest rate reductions in 2025. 

“The recent market selloff potentially brought us closer to the strike prices for both the Fed and Trump puts,” Seliger and Hamm wrote in a note Monday. 

The note claimed the committee’s relatively dovish commentary shows the central bank is particularly attuned to concerns about slowing growth, despite inflation remaining above the Fed’s 2% target. 

Meanwhile, Seliger and Hamm said recent developments in U.S. trade policy underline the Trump put is also real. After a relatively quiet week for tariff announcements, reports from the Wall Street Journal and Bloomberg over the weekend claimed the administration was considering narrowing the scope of the so-called reciprocal tariffs being unveiled April 2, which the president initially ordered economic officials to design specific to virtually every U.S. trading partner. 

Markets got a boost off the news early this week, but the S&P 500 fell over 1% Wednesday ahead of Trump’s announcement of a 25% tariff on imported vehicles and auto parts.

Update: This story was updated to include a statement from White House spokesman Kush Desai.