It’s a truism that businesses do not like (and tend to struggle) when uncertainty runs high. The less you know about what’s coming, the harder it is to plan ahead.

Sometimes you get knocked sideways because you are not looking hard enough at what’s going on around you (Blockbuster comes to mind). But often, and this is the case at the moment with U.S. trade policy, the uncertainty is so great that following what’s happening almost makes it worse!

How long is this going to last? Which tariffs will be imposed and which will be changed in some way? What, if anything, can be done to get the tariffs lifted? What is the President’s endgame? How will other countries respond? How will all this flow through the billions of daily transactions that form the economy and push it in one direction or another? How will it affect my business, my industry, my organization, my job, my friends, my family?

That uncertainty is indeed running high (and not just a preoccupation of anxious economists) is evident in the recent readings of the Economic Policy Uncertainty Index for Canada.

Developed by Scott Baker, Nicholas Bloom, and Stephen Davis and published by the Federal Reserve Bank of St. Louis, the Index is based on media references. While not perfect, it is correlated with other proxies like stock market volatility. It also foreshadows investment and employment declines.

The Index has spiked to its highest level on record, well-above the previous peak seen during the early days of COVID—85% higher in fact, as the chart below shows.

You might say, “that’s a bit dramatic!” After all, not everything is going to change or fail because of a trade war and uncertainty is far from new.

Fair enough, but it is still prudent to acknowledge that the level of uncertainty is extra high and that the way ahead is significantly more clouded than we would like.

The takeaway here is not to give up trying to reduce that uncertainty by analyzing the facts, identifying the trends, and learning from past patterns—all while staying open to new possibilities. Peering into the fog is much better than pretending it’s not foggy or just giving up.

So watch for our new forecast later this month (complete with alternative scenarios) and for other lights in the fog as we all seek to navigate these extra uncertain times.

Answer to the previous trivia question: It’s true: canola is part of the mustard family.

Today’s trivia question: What is the unofficial slogan (even though it is on the license plates) of the state of Missouri (where the St. Louis Fed is located)?