Hassett, serving as Trump’s director of the National Economic Council, is focusing on reviving relations with China. Discussions will continue with officials like Greer and Bessent playing key roles.

There is an anticipation that markets might witness a ‘normalisation’ in various aspects. Over the coming weeks, there are 24 trade talks scheduled to further these efforts.

Key Insights from Interview

Hassett shared these insights during an interview on CNBC.

These remarks by Hassett point towards a deliberate effort to rekindle diplomatic and economic ties with China. From what has been said, it’s apparent that talks won’t be casual remarks through press statements, but rather structured, formal sessions—two dozen of them, scheduled and laid out, indicating a heavy push toward stabilising a previously turbulent dynamic.

Greer and Bessent, both influential in financial and political strategy spaces, are poised to be more than background voices. Their ability to steer discussion and shape expectations will be directly influencing real capital decisions. For anyone whose positions or models rely heavily on volatility pricing, the planned consistency in talks alone demands a re-think.

Normalisation in this context likely refers to a return to less erratic trade policy—possibly fewer abrupt tariff shifts and fewer unpredictable executive manoeuvres.

Impact on Market Dynamics

For us, this translates to tighter trading ranges and reduced intraday swings on politically sensitive instruments. It also increases the probability of clarity in pricing longer-term derivatives, especially those touching interest rate differentials or cross-border trade volume assumptions.

Given the deliberate nature of this diplomatic engagement, we may also see increased predictability in macro data releases and reduced arbitrage opportunities across Asian and American sessions, at least for high-frequency models that price off trade war noise. Those dependent on gamma-heavy structures or calendar spreads may need to account for smoother transitions between meetings, as price dislocations tied purely to headline risk may gradually soften.

This next stretch isn’t about speculation over outcomes, but rather about watching for consistency in tone and follow-through from announcements to execution. The burden of surprise may shift more towards external data than political tweetstorms. That alone nudges short-dated implied volatility lower, and makes calendar spreads with steep IV curves less attractive on the long side—though optimal flow dynamics may still favour carry strategies in front-loaded gamma books.

Overall, what we’ve heard sets a tone of intentionality—where uncertainties might linger, but the cadence of talks provides a rhythm that policy-sensitive instruments have lacked in recent quarters. We’re treating it as an alignment moment where repricing doesn’t happen overnight, but where each added meeting lays the groundwork for tighter bid-ask spreads and leaner hedging assumptions.

Create your live VT Markets account and start trading now.