Financial markets and business activity respond not only to enacted laws, but to credible signals about future policy. Tariff announcements operate as such signals, conveying information about the likely direction of trade policy before any statute, regulation, or executive order takes effect. Because modern economies are forward-looking, these announcements can influence behavior immediately, well ahead of formal implementation.
Expectations as an Economic Force
At the core of this process is expectations formation—the way households, firms, and investors anticipate future economic conditions. When a tariff proposal is announced, economic actors begin revising assumptions about future prices, costs, and market access. These revised expectations can alter decisions in real time, even if the legal framework remains unchanged.
For businesses, expected tariffs raise the anticipated cost of imported inputs or reduce expected demand for exported goods. This expectation alone can be sufficient to delay hiring, postpone capital expenditures, or accelerate inventory purchases. The economy responds not to the tariff itself, but to the belief that the tariff is likely to arrive.
Uncertainty and the Cost of Waiting
Tariff announcements also increase policy uncertainty, defined as the difficulty of predicting future government actions that affect economic outcomes. Elevated uncertainty raises the value of waiting, particularly for irreversible investments such as factory construction or long-term supply contracts. Firms may choose to pause expansion plans until the policy outlook becomes clearer.
This dynamic can slow economic momentum even without a change in trade flows. When many firms delay decisions simultaneously, aggregate investment weakens, reducing demand for labor and intermediate goods. The effect is gradual but measurable, especially in sectors directly exposed to international trade.
Immediate Transmission Through Financial Markets
Financial markets process policy signals rapidly because asset prices reflect discounted expectations of future cash flows. Tariff announcements can trigger movements in equity prices, bond yields, and exchange rates within minutes. These shifts represent market judgments about how trade restrictions might affect corporate profits, inflation, and economic growth.
For example, firms reliant on imported components may see share prices decline on expectations of margin pressure. Currencies can also react, as tariffs imply changes in trade balances and capital flows. These market responses can tighten or loosen financial conditions, influencing borrowing costs for businesses and households.
Supply Chains React Before Rules Change
Modern supply chains are global, complex, and optimized for cost efficiency. Even the prospect of tariffs can prompt firms to reconfigure sourcing strategies, seek alternative suppliers, or relocate production. These adjustments often begin during the announcement phase because supply chains cannot be reorganized instantly.
Such preemptive changes can increase short-term costs, as alternative suppliers may be more expensive or less efficient. These higher costs can feed into price-setting decisions, contributing to upward pressure on inflation expectations before any tariff revenue is collected.
Inflation Forecasts and Consumer Sentiment
Tariff announcements influence inflation forecasts by signaling potential increases in import prices. Inflation expectations, defined as beliefs about future price changes, matter because they affect wage negotiations, pricing behavior, and monetary policy decisions. Central banks monitor these expectations closely, even when tariffs remain hypothetical.
Consumers also respond to policy signals. News of potential tariffs can reduce consumer sentiment, a measure of households’ confidence in the economy and their personal finances. Lower sentiment can translate into more cautious spending behavior, reinforcing the economic impact of the announcement itself rather than the policy’s eventual implementation.
Expectations as an Economic Force: How Businesses, Markets, and Consumers Price in Future Tariffs
Economic outcomes are shaped not only by enacted policies, but by expectations about future policy. In macroeconomics, expectations refer to how households, firms, and investors form beliefs about future prices, costs, and growth, and adjust behavior accordingly. When tariff proposals gain political credibility, they begin influencing decisions well before any legal enforcement.
This dynamic explains why tariff announcements can generate measurable economic effects even in the absence of formal implementation. Anticipated changes in trade policy alter risk assessments, cost structures, and strategic planning across the economy. As a result, expectations themselves become a transmission channel for economic impact.
Financial Markets as Forward-Looking Mechanisms
Financial markets are inherently forward-looking, meaning asset prices reflect expectations about future earnings, inflation, and policy conditions. When tariffs are announced, equity investors reassess corporate profitability, particularly for firms exposed to imported inputs or export markets. These reassessments can lead to immediate repricing of stocks, sector valuations, and broader indices.
Bond markets also respond to tariff expectations. If tariffs are expected to raise inflation or slow growth, investors may demand higher yields on government or corporate debt to compensate for increased risk. Changes in yields influence borrowing costs across the economy, affecting investment and consumption decisions even before tariffs take effect.
Business Investment and the Cost of Uncertainty
Tariff announcements introduce policy uncertainty, defined as difficulty predicting future regulatory and cost conditions. For businesses, uncertainty raises the risk of long-term investments in equipment, facilities, and hiring. When future input costs or market access become unclear, firms often delay or scale back capital expenditures.
This postponement has macroeconomic consequences. Investment is a key driver of productivity growth and employment, and reduced investment can slow economic momentum. Even if tariffs are never implemented, the period of uncertainty can leave a lasting imprint on business activity.
Supply Chain Decisions as Anticipatory Adjustments
As discussed earlier, supply chains respond early because they are costly and time-consuming to restructure. Expectations of future tariffs can prompt firms to diversify suppliers, increase inventories, or shift production locations preemptively. These actions are rational responses to perceived future risks, not reactions to enacted policy.
However, such adjustments are rarely cost-neutral. Inventory buildup ties up capital, alternative suppliers may charge higher prices, and relocating production often involves transitional inefficiencies. These costs can feed into prices and margins well before tariffs appear in customs data.
Inflation Expectations and Price-Setting Behavior
Tariff announcements affect inflation expectations by signaling higher future import prices. Inflation expectations influence how firms set prices and how workers negotiate wages, as both groups attempt to protect purchasing power. When businesses expect higher costs ahead, they may raise prices earlier or more aggressively.
This behavior can contribute to inflationary pressure independent of actual tariff collections. Central banks monitor these shifts closely because expectations-driven inflation can become self-reinforcing. As a result, monetary policy may tighten or remain restrictive in response to anticipated, rather than realized, trade barriers.
Consumer Behavior and Precautionary Responses
Consumers also internalize policy signals when forming spending decisions. Anticipated tariffs can raise concerns about future prices, job security, or overall economic stability. These concerns may lead households to increase precautionary saving, defined as saving motivated by uncertainty about future income.
Reduced consumer spending can dampen demand across sectors, particularly for discretionary goods. This reaction reinforces the broader economic impact of tariff expectations, demonstrating how policy signals alone can influence real economic behavior.
Financial Markets React First: Equity Volatility, Currency Moves, and Bond Market Signals
Financial markets often transmit policy expectations into prices faster than the real economy can adjust. Unlike firms or households, markets continuously reprice assets based on anticipated future conditions. As a result, tariff announcements tend to register immediately through volatility, cross-border capital flows, and shifts in interest rate expectations.
These market responses are not speculative side effects; they are mechanisms through which uncertainty influences financing conditions, investment decisions, and economic momentum well before any tariff is collected.
Equity Markets and the Pricing of Policy Uncertainty
Equity markets respond to tariff announcements by reassessing expected corporate earnings and risk. Tariffs raise concerns about higher input costs, disrupted supply chains, and potential retaliation, all of which can compress profit margins or reduce revenue growth. Even firms not directly exposed to trade may face valuation pressure as overall uncertainty increases.
This uncertainty is often reflected in higher equity volatility, meaning larger and more frequent price swings. Volatility measures capture investor disagreement about future outcomes, not just negative sentiment. Elevated volatility can raise the cost of capital for firms, as investors demand higher returns to compensate for increased risk.
Currency Markets and Anticipated Trade and Growth Effects
Foreign exchange markets, which determine the relative value of currencies, are particularly sensitive to tariff expectations. Currencies move based on anticipated trade balances, capital flows, and monetary policy responses. Announced tariffs can strengthen or weaken a currency depending on how markets assess their impact on growth and inflation.
For example, expectations of slower domestic growth may weaken a currency, while expectations of higher inflation and tighter monetary policy may strengthen it. These currency movements feed back into the economy by altering import prices, export competitiveness, and financial conditions, amplifying the initial policy signal.
Bond Markets, Interest Rates, and Recession Signals
Bond markets provide some of the clearest signals of how investors interpret tariff announcements. Government bond yields reflect expectations about future inflation, economic growth, and central bank policy. When tariff threats increase uncertainty, investors often shift toward safer assets, pushing bond prices up and yields down.
Particular attention is paid to the yield curve, which plots interest rates across different maturities. If long-term yields fall relative to short-term yields, it can indicate expectations of slower growth or future policy easing. These signals influence borrowing costs for businesses and households, reinforcing the economic impact of anticipated trade restrictions.
Together, equity, currency, and bond market reactions illustrate how financial systems internalize policy signals rapidly. By altering valuations, exchange rates, and financing conditions, markets help translate tariff expectations into real economic effects long before any formal implementation occurs.
Business Decision Paralysis: Investment Delays, Inventory Front-Loading, and Capex Repricing
As financial markets rapidly reprice risk, those signals transmit directly into corporate decision-making. Firms do not wait for tariffs to be legally enacted; they respond to expected changes in costs, demand, and financing conditions. The result is a measurable slowdown and distortion in business activity driven by uncertainty rather than realized policy.
Investment Delays and the Value of Waiting
Heightened policy uncertainty increases what economists call the option value of waiting—the incentive for firms to postpone irreversible decisions until outcomes become clearer. Large investments, particularly those involving new facilities, long-lived equipment, or cross-border supply chains, become harder to justify when future input costs and market access are uncertain.
This dynamic leads firms to delay or cancel capital projects even if current demand remains stable. The macroeconomic effect is weaker business investment growth, which directly subtracts from gross domestic product and indirectly affects employment, productivity, and supplier networks.
These delays are not evenly distributed across the economy. Industries with complex global supply chains, high import intensity, or thin margins tend to be most sensitive to tariff expectations, amplifying sector-specific slowdowns that can spill over into broader economic activity.
Inventory Front-Loading and Supply Chain Distortions
Another immediate response to anticipated tariffs is inventory front-loading, where firms accelerate imports ahead of potential cost increases. By building inventories early, businesses attempt to lock in pre-tariff prices and protect short-term margins.
While rational at the firm level, widespread front-loading distorts trade and production data. Imports may surge temporarily, followed by sharp pullbacks once inventories are saturated, creating artificial volatility in economic indicators that complicates forecasting and policy assessment.
These distortions also strain logistics networks, raise warehousing costs, and increase working capital needs. Working capital refers to the cash tied up in day-to-day operations, and higher inventory levels reduce financial flexibility, particularly for smaller firms with limited access to credit.
Capex Repricing and Higher Hurdle Rates
Capital expenditures, often shortened to capex, represent long-term investments in productive assets such as machinery, technology, and infrastructure. When tariff threats elevate uncertainty and market volatility, firms reassess the expected returns on these investments.
Rising equity volatility, shifting exchange rates, and lower bond yields collectively alter corporate hurdle rates—the minimum return required for an investment to be approved. Even if financing remains available, higher perceived risk means fewer projects meet internal return thresholds.
This repricing effect suppresses investment without any formal policy change. By increasing the cost of capital and reducing confidence in long-term cash flows, tariff announcements alone can slow capital formation, weaken future productive capacity, and reduce the economy’s growth potential before any tariffs are collected.
Supply Chains Under Anticipation Stress: Preemptive Rerouting, Sourcing Shifts, and Cost Creep
As capital spending slows and inventories swell, pressure migrates quickly into global supply chains. Modern supply networks are optimized for cost and reliability under stable policy assumptions, making them particularly sensitive to anticipated trade disruptions. Even before tariffs are enacted, firms adjust logistics and sourcing decisions to reduce exposure to potential policy shocks.
Preemptive Rerouting and Logistical Inefficiency
One immediate response to tariff threats is preemptive rerouting of goods to avoid jurisdictions expected to face higher duties. Firms may redirect shipments through alternative ports, intermediaries, or transit countries, even when those routes are longer or less efficient.
These adjustments increase transportation costs, transit times, and administrative complexity. Customs compliance, rules-of-origin verification, and documentation requirements become more burdensome, raising non-tariff trade costs that are economically equivalent to a price increase.
Such inefficiencies rarely appear in headline tariff data but are reflected in higher landed costs, meaning the total cost of delivering a product to its final destination. Over time, these hidden frictions erode productivity and reduce the gains from global trade specialization.
Sourcing Shifts and Supplier Risk Repricing
Anticipated tariffs also prompt firms to reassess supplier concentration and geographic exposure. Businesses begin shifting orders away from countries perceived as tariff targets toward alternative suppliers, even if those alternatives are structurally more expensive or less technologically advanced.
This process reprices supplier risk. Long-standing relationships optimized for quality and scale are replaced with newer, less tested vendors, increasing defect rates, coordination costs, and uncertainty in delivery schedules.
Importantly, these sourcing shifts are often incremental rather than decisive. Firms hedge by spreading orders across multiple suppliers, sacrificing economies of scale in exchange for optionality, which raises unit costs across the supply chain.
Cost Creep and Early Inflation Transmission
The cumulative effect of rerouting and sourcing changes is cost creep—a gradual, persistent increase in input costs that occurs without any formal tariff being levied. These higher costs enter corporate accounting through freight expenses, procurement contracts, and inventory valuation.
Even when firms attempt to absorb these increases initially, profit margins compress, reinforcing the investment pullbacks described earlier. Over time, businesses begin adjusting prices, contributing to upward revisions in inflation expectations.
Inflation expectations refer to the rate at which households and firms expect prices to rise in the future. When expectations shift higher due to anticipated policy costs, wage negotiations, pricing strategies, and consumer behavior adjust accordingly, transmitting the economic impact of tariffs well before their legal implementation.
Inflation Without Implementation: How Tariff Threats Alter Price Forecasts and Fed Expectations
As cost creep feeds into corporate pricing decisions, the macroeconomic impact becomes visible through inflation forecasting channels rather than realized tariff revenue. Even absent legal enforcement, tariff threats function as policy signals that reshape expectations about future prices, costs, and monetary conditions.
Policy Signals and the Forward-Looking Nature of Inflation
Inflation is inherently forward-looking. Firms set prices based not only on current costs but also on expected future input prices, wages, and demand conditions.
When tariff announcements raise the probability of higher import costs, businesses revise internal price forecasts upward. These revisions occur well before any customs duties are collected, embedding anticipated policy costs into contracts, list prices, and wage negotiations.
From Corporate Forecasts to Market-Based Inflation Expectations
Changes in business pricing behavior feed into financial markets that track expected inflation. One widely monitored measure is breakeven inflation, derived from the yield difference between nominal Treasury bonds and inflation-protected securities, which reflects investors’ expectations of future inflation.
Tariff threats tend to push breakeven inflation higher by increasing the perceived risk of supply-side price pressures. This effect is amplified when tariffs target intermediate goods, as higher production costs propagate through multiple stages of the economy.
Implications for Federal Reserve Policy Expectations
The Federal Reserve sets monetary policy based on its dual mandate of price stability and maximum employment. Price stability is assessed not only through current inflation data but also through expected inflation over the medium term.
When tariff threats elevate inflation expectations, markets begin to reassess the future path of interest rates. Even if actual inflation remains subdued, the risk of policy-induced price pressures can reduce the perceived scope for interest rate cuts or increase expectations of prolonged restrictive policy.
Uncertainty, Risk Premia, and Financial Conditions
Tariff uncertainty also affects inflation indirectly by tightening financial conditions. Financial conditions describe the ease with which households and firms can access credit, influenced by interest rates, equity valuations, and risk premiums.
As policy uncertainty rises, investors demand higher compensation for risk, increasing borrowing costs and volatility. This combination of higher expected inflation and tighter financial conditions complicates central bank decision-making, reinforcing the economic impact of tariff threats without any formal policy action.
Consumer Sentiment and Behavioral Reinforcement
Households respond to tariff rhetoric through expectations as well. Survey-based measures of consumer inflation expectations often rise following high-profile trade policy announcements, particularly when media coverage emphasizes higher prices for everyday goods.
Elevated consumer inflation expectations can accelerate purchasing decisions or increase wage demands, reinforcing the inflationary impulse. In this way, tariff threats influence behavior across firms, markets, and households simultaneously, translating anticipation into measurable economic effects long before implementation occurs.
Consumer Sentiment and Confidence Channels: Fear of Higher Prices and Job Risk
As expectations adjust across firms and financial markets, the household sector becomes a parallel transmission channel. Tariff announcements influence consumer sentiment by reshaping perceptions of future prices, job security, and real purchasing power, even in the absence of enacted policy. These perceptions matter because consumption decisions are driven not only by current income, but by expectations about future economic conditions.
Inflation Expectations and Perceived Cost-of-Living Pressure
High-visibility tariff announcements often lead households to expect higher prices for everyday goods, particularly imports or import-intensive products such as electronics, apparel, and automobiles. Inflation expectations refer to consumers’ beliefs about how fast prices will rise in the future, and these expectations tend to respond quickly to trade-related headlines.
When households anticipate higher prices, they may accelerate purchases of durable goods or reduce discretionary spending to preserve purchasing power. This behavioral shift can temporarily boost demand in some categories while weakening it in others, creating uneven consumption patterns that complicate economic forecasting and inventory planning.
Precautionary Behavior and Confidence Erosion
Beyond price concerns, tariff uncertainty can erode overall consumer confidence, defined as households’ assessment of current and future economic conditions. Lower confidence is associated with precautionary saving, where households increase savings as a buffer against perceived economic risk.
This response dampens consumption growth, particularly for non-essential services and large-ticket items. Even modest declines in confidence can have outsized macroeconomic effects, as consumer spending accounts for a substantial share of aggregate economic activity.
Job Security Concerns and Labor Market Perceptions
Tariff threats also shape expectations about employment stability, especially in sectors exposed to global supply chains or export demand. Manufacturing, transportation, agriculture, and retail are often highlighted in public discourse, reinforcing fears of layoffs, reduced hours, or hiring freezes.
Perceived job risk can influence household behavior well before any measurable deterioration in labor market data. Workers who believe their employment is vulnerable are more likely to delay spending, reduce debt-taking, and resist major financial commitments, amplifying the slowdown effects associated with policy uncertainty.
Feedback Loops Between Sentiment and Economic Outcomes
Changes in consumer sentiment can become self-reinforcing. Weaker spending growth feeds into slower business revenues, which can validate initial concerns about hiring and investment, further pressuring confidence.
In this way, tariff announcements operate not only through prices and trade volumes, but through psychological and behavioral channels. By altering expectations about inflation and employment, policy signals alone can generate real economic effects, embedding tariff-related risks into the economy well before any formal implementation occurs.
Historical Parallels: What the 2018–2019 Trade War Taught Markets About Anticipatory Effects
The economic dynamics observed during the 2018–2019 U.S.–China trade conflict provide a clear empirical reference for how tariff policy signals affect the economy before legal implementation. In that episode, announcements, negotiation breakdowns, and tariff threats repeatedly moved markets and business behavior ahead of actual changes in trade rules.
Rather than waiting for tariffs to take effect, firms, households, and financial markets adjusted expectations in real time. These anticipatory responses produced measurable effects on investment, pricing behavior, and economic growth well in advance of formal enforcement.
Financial Markets as Early Transmission Channels
Equity markets reacted sharply to tariff announcements during 2018–2019, particularly in sectors exposed to global trade such as industrials, semiconductors, and consumer electronics. Stock prices reflect discounted expectations of future earnings, meaning anticipated cost increases or demand disruptions were priced in immediately.
Bond markets conveyed similar signals. Yield curves, which plot interest rates across different maturities, flattened during periods of intensified trade tension, indicating expectations of slower future growth and subdued inflation. These financial responses occurred regardless of whether tariffs were ultimately imposed, delayed, or partially reversed.
Business Investment Delays and Capital Spending Retrenchment
Corporate investment proved especially sensitive to tariff uncertainty. Capital expenditure, defined as spending on equipment, machinery, and structures, slowed notably in 2019 despite solid consumer demand and low interest rates.
Surveys of business leaders consistently cited trade policy uncertainty as a reason for postponing or canceling investment plans. Even firms not directly subject to tariffs faced difficulty forecasting input costs, export access, and supplier stability, leading to a broad-based pullback in expansion activity.
Supply Chain Reconfiguration Before Tariffs Took Effect
The trade war demonstrated that supply chains respond to anticipated policy changes, not just enacted ones. Companies accelerated inventory accumulation, diversified sourcing, or initiated relocation of production in response to tariff threats alone.
These adjustments carried real economic costs. Inventory front-loading temporarily boosted imports, followed by sharp declines, increasing volatility in trade data. Relocation decisions raised fixed costs and reduced efficiency, effects that materialized regardless of whether tariffs were later scaled back.
Inflation Expectations Without Immediate Price Inflation
During 2018–2019, tariff announcements raised inflation expectations even when consumer price indices showed limited immediate pass-through. Inflation expectations refer to households’ and firms’ beliefs about future price increases, which influence wage negotiations, pricing strategies, and monetary policy assumptions.
Firms began adjusting pricing models and contract terms preemptively, while central banks incorporated trade risks into forward-looking assessments. This divergence between expectations and realized inflation illustrates how policy signals can influence economic behavior independently of current price data.
Consumer Sentiment and Spending Behavior
Consumer confidence weakened during periods of heightened trade tension despite stable employment and income growth. Survey data showed rising concern about prices, job security, and broader economic conditions following tariff announcements.
These sentiment shifts aligned with slower growth in discretionary spending, particularly on durable goods sensitive to future income expectations. As seen during the trade war, households responded to perceived policy risk rather than waiting for direct price increases at the retail level.
Lessons for Interpreting Current Tariff Signals
The 2018–2019 experience underscores that tariff policy operates as an expectations-driven shock. Markets, firms, and consumers interpret announcements as information about future costs, growth, and stability, adjusting behavior immediately.
This historical pattern explains why economic effects can emerge even when tariffs remain hypothetical. Policy signals alone can alter financial conditions, investment decisions, and confidence, embedding economic consequences well before any formal implementation occurs.
What Investors and Business Owners Should Watch Next: Data Points That Confirm or Reverse the Signal
If tariff policy functions primarily through expectations, then confirmation or reversal of its economic impact will appear first in forward-looking data rather than lagging indicators. The most informative signals will reflect changes in confidence, financial conditions, and planning behavior before they show up in realized inflation or employment figures.
Financial Conditions and Market-Based Expectations
Financial conditions indices aggregate indicators such as equity prices, bond yields, credit spreads, and exchange rates to measure how easy or restrictive financing is across the economy. A sustained tightening following tariff announcements would indicate that markets are pricing in slower growth or higher risk, even absent enacted policy.
Market-based inflation expectations, including Treasury Inflation-Protected Securities breakeven rates, are especially important. Breakevens measure the inflation rate at which investors are indifferent between nominal and inflation-protected bonds, offering real-time insight into how tariffs are expected to affect future prices.
Business Surveys and Capital Expenditure Intentions
Business sentiment surveys, such as purchasing managers’ indices and regional Federal Reserve surveys, capture firms’ expectations about orders, costs, and investment. Deterioration in these surveys following tariff signals would suggest that uncertainty is translating into operational caution.
Capital expenditure intentions are particularly revealing. Capital expenditure refers to spending on long-lived assets like machinery, factories, and technology, which firms delay when policy uncertainty rises. Stabilization or improvement in planned investment would indicate that tariff risks are being reassessed or discounted.
Supply Chain Indicators and Inventory Behavior
Inventory accumulation patterns provide insight into how firms are managing potential trade disruptions. Elevated inventory-to-sales ratios may reflect precautionary stockpiling ahead of possible tariffs, a behavior observed during earlier trade tensions.
Shipping volumes, supplier delivery times, and import order data can confirm whether supply chains are being restructured in anticipation of higher trade barriers. A reversal in these indicators would suggest reduced concern about future cost shocks.
Consumer Expectations and Spending Signals
Consumer inflation expectations and confidence surveys often move ahead of actual spending data. Rising expectations without corresponding wage growth can constrain discretionary spending, particularly for big-ticket items that rely on stable future income assumptions.
Retail sales of durable goods and credit usage trends can validate whether sentiment shifts are translating into behavior. Weakness in these areas would reinforce the view that tariff signals are affecting household decision-making before prices change.
Trade Flows, Exchange Rates, and Pricing Power
Import and export volumes, alongside changes in trade-weighted exchange rates, reveal how markets are reallocating demand in response to anticipated tariffs. Currency movements are especially important, as exchange rate appreciation or depreciation can offset or amplify tariff-related price effects.
Import price indices should be monitored for early pass-through. If prices rise in anticipation rather than after implementation, it confirms that firms are adjusting margins and contracts based on expected policy rather than realized costs.
Interpreting the Signal Holistically
No single data point will confirm the economic impact of tariff announcements. The signal becomes credible when multiple forward-looking indicators move in the same direction, reinforcing the role of expectations as a transmission mechanism.
Conversely, stabilization in financial conditions, investment plans, and sentiment would suggest that markets and firms are treating tariff rhetoric as less binding. In either case, the key lesson is that policy signals shape economic outcomes well before legislation or enforcement, making expectations-driven data the primary lens through which early effects should be assessed.