The yield on the US 10-year Treasury note climbed to 4.1% after the US Supreme Court struck down President Donald Trump’s broad emergency tariffs, a cornerstone of his economic agenda. The Court ruled that the International Emergency Economic Powers Act (IEEPA) cannot be used to impose sweeping tariffs without explicit authorization from Congress.
At the same time, investors assessed a new round of economic data and its implications for Federal Reserve policy. The US economy expanded at an annualized rate of 1.4% in the fourth quarter, well below the 3% consensus forecast, heightening concerns about slowing momentum in the wake of the tariffs and the government shutdown.
December PCE data showed both headline and core inflation rising faster than anticipated. The S&P Global US Composite PMI signaled the weakest pace of private-sector expansion in ten months, while new home sales fell to 745,000 units following November’s near four-year high.
Minutes from the latest FOMC meeting underscored divisions among policymakers, with several officials indicating that additional rate increases may be warranted if inflation remains stubbornly high.
