If there’s one thing investors have learned in recent days, it’s that there’s no way to guess what America will do next. With its on-again, off-again tariffs, the administration has demonstrated a willingness to shock markets.

Amid such radical uncertainty, a financial crisis isn’t out of the question. Policymakers need to be prepared for the worst.

Such crises follow a familiar pattern, whether the cause is a housing bust, a pandemic or, in the current case, the premeditated actions of the world’s biggest economy.

The catalyst is debt, which investors use to buy many times more assets than they otherwise could. When prices fall sharply, lenders demand more cash collateral or pull out entirely, forcing asset sales that send prices down further in a vicious cycle.

If the assets aren’t worth enough to pay all the debt, lenders suffer losses. If those losses threaten the financial system and the broader economy, governments must step in with taxpayer-funded bailouts.

Ideally, financial companies should have ample resources to absorb losses and prevent contagion. They don’t.

In one of the world’s most important markets, U.S. Treasuries, hedge funds are so leveraged that spikes in volatility can quickly send them to the exits. Systemically important banks lack the equity capital needed to survive worst-case scenarios on their own.

The main public backstop — the U.S. government — is itself troublingly stretched, with vast budget deficits rapidly expanding a sovereign-­debt burden that is already the largest since the last world war.

These fundamental vulnerabilities can’t be remedied quickly. Regulators are contending with administration demands that they cut as many as 1 in 5 employees.

There’s scant political appetite to raise capital or collateral requirements, which in any case shouldn’t be done under duress. Demanding more right away, with the prospect of a crisis looming, could make things worse.

What, then, can financial authorities do? They should have three priorities: Identify the weakest links, keep markets functioning as smoothly as possible and provide solvent firms with ample access to cash so they won’t dump assets or fail unnecessarily.

In markets, the goal should be to ensure that financing disruptions don’t distort prices. In the Treasury market, for instance, the Federal Reserve’s standing repo facility guarantees that certain banks and dealers can always borrow cash against government bonds. But it doesn’t apply to hedge funds, which, for all their fragility, play a crucial role in aligning the prices of Treasuries and their derivatives.

The Fed should thus stand ready to take on their role if they withdraw. This would be a far better solution than the loosening of bank capital requirements that Treasury Secretary Scott Bessent has suggested.

Finally, financial institutions abroad hold dollar-denominated assets funded by borrowing in dollars. To prevent that funding from evaporating in a crisis, the Fed has established currency swap lines that empower counterparts such as the European Central Bank and the Bank of England to lend the U.S. currency.

Although activating the swap lines might prove politically fraught, officials should stress that it’s in America’s best interests, preventing fire sales that would harm U.S. firms as well.

It’s unfortunate that policymakers need to contemplate a self-inflicted crisis of this kind. But the possibility must be taken seriously.

Regulators everywhere should do what they can to be ready.