Good Intentions, No Follow-Through: Why Policy Uncertainty Is Keeping Markets Flat

The financial markets are not panicking. They’re not collapsing. They’re not even screaming.

They’re sighing. Loudly.

Investors aren’t suddenly confused by math. They’re confused by the whiplash. One day it’s tariffs on, next day tariffs off. Government jobs are bloated, then they’re strategic. Spending is reckless, then it’s necessary. Economic priorities shift depending on which microphone happens to be nearby. Markets can price risk all day long. What they cannot price is “we’ll see how we feel after lunch.”

And when the policy environment feels more like improv than strategy, capital does what capital always does: it sits on its hands.

You can see this hesitation everywhere. Stocks have quietly drifted off recent highs. Bonds haven’t rallied. And when the President floated the idea that the U.S. Treasury might buy more than $200 billion in agency mortgage-backed securities, the bond market’s reaction was… a polite nod. No celebration. No rally. No meaningful drop in yields. Just a collective “That’s interesting—call us when it’s real.”

If investors believed that policy was imminent, executable, and legally feasible, the 10-year Treasury would already be moving lower. Instead, it’s parked around 4.15%, which is the market’s way of saying, “We hear you. We just don’t believe you yet.”

Then we get to the renewed call to lower credit card interest rates to around 10%. On the surface, this sounds wonderful. Who doesn’t want cheaper debt? But once you move past the applause line, the economics get complicated quickly. Rate caps distort risk pricing. Distorted risk pricing reduces access to credit. And reduced access to credit usually hurts the very consumers the policy claims to protect.

What makes this moment especially fascinating is that this idea isn’t new. A bipartisan bill proposing something nearly identical—introduced last year by Representatives Anna Paulina Luna and Alexandria Ocasio-Cortez—failed rather spectacularly. Same idea. Same economics. Different political timing. Now it’s back, freshly repackaged.

To markets, this isn’t innovation. It’s noise.

And markets hate noise.

They don’t reward intentions. They reward execution. They don’t trade on aspiration. They trade on credibility. Clarity matters. Consistency matters. Follow-through matters. Without those, investors don’t flee—but they don’t commit either.

So for now, money is parked. Conviction is scarce. The market is neither bullish nor bearish—it’s tired. And until policy signals become clearer and more durable than the latest headline, this sideways grind is likely exactly where we stay.