this week
For one short week, there was no shortage of news!
Supreme Court today ruled against Tariffs, particularly “reciprocating” country-specific tariffs and using the International Emergency Economic Powers Act (IEEPA) to impose fentanyl tariffs on China, Mexico, and Canada, which increased estimated $175 billion in revenue (half of all tariff revenues from the beginning of 2025).
Shortly thereafter, President Trump made an announcement 10% global tariff On top of “our general tariffs” through Section 122 of the Trade Act of 1974, which allows the President to impose tariffs to address “large and serious United States balance of payments deficits.” These can be applied only up to 150 days And cannot exceed 15%. President Trump also said he would eventually initiate an investigation under Section 301 to impose long-term tariffs. We will have to wait for more details to get a clear picture.
But that’s not all! We also found:
- Fourth quarter GDP growth much weaker than expected due to government shutdown: Real GDP grew only +1.4% on an annual basis in the fourth quarter – half Expectations of consensus. ButThe federal government shutdown caused growth to decline by 1% (and this should largely reverse in Q1), while domestic demand grew at a solid +2.4% pace.
- Headline PCE inflation up to 2.9% y-o-y: Unlike CPI, PCE inflation is still rising (partly because housing has a much lower weighting in PCE), and it was boosted by food and staples.
- January Fed minutes show openness to hike: With “some signs of stabilization” in the labor market and inflation still above target, “many” participants were ready to describe future rate decisions as “two-sided”, meaning a cut or a hike.
And after all that, the Nasdaq-100® is up +1% this week, and 10-year Treasury yields are up just a few basis points to about 4.1%.
next week
Here are the top shows I’m watching next week:
- Tuesday: state of the Union
- Wednesday: NVDA earnings
- Thursday: unemployment allowance
- Friday: Production Price Inflation (January)
