The Supreme Court clipped the old tariff playbook, so the White House grabbed a new one off the shelf and hit print anyway.

The result is a fresh 15% global tariff that kicks in immediately, comes with a hard 150 day clock, and sets up the next round of legal and political chaos.

Overseas partners are not celebrating because nobody believes the tariff era is ending.

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The Big Picture

Credit Markets

A $260 Billion Loan Market Is Waking Up to an AI-Shaped Problem

Software companies across the U.S. are delaying debt deals as lenders demand higher yields, deeper discounts, and stricter protections.

The reason is not a recession or a rate shock — it is artificial intelligence.

The software index has dropped 20% this year, and the chill has spread from equity markets into leveraged lending.

Several planned deals have been pulled or postponed since late January, and no new leveraged loans for software firms are currently in the market.

$260 Billion in Loans, Half Rated Near Default Territory

Technology borrowers make up the largest slice of the U.S. leveraged loan market at $260 billion, and 60% of that sits in software.

Half of those loans carry credit ratings of B- or lower — the zone where default risk is highest.

That concentration matters. When the biggest sector in leveraged lending starts wobbling, the stress does not stay contained.

It spreads to banks, private credit funds, and the broader appetite for risk.

Covenants Are Coming Back

Lenders are no longer writing blank checks.

Future deals are expected to carry maintenance covenants that force borrowers to maintain debt-to-earnings ratios below strict thresholds — a sharp reversal from the loose terms that defined the easy-money era.

For the U.S. economy, tighter software lending means less capital flowing into one of its most productive sectors.

When credit conditions shift this fast, hiring slows, acquisitions stall, and innovation budgets shrink — all before a single default actually hits.

Treasuries

The Treasury Market Just Got a $170 Billion Question It Cannot Answer

The Supreme Court struck down a wave of tariffs, and markets briefly exhaled. But the ruling left a critical question wide open — what happens to the estimated $170 billion already collected?

No decision on refunds means the fiscal math is suddenly fuzzy, and litigation that could take months is already lining up in lower courts.

Replacement levies landed almost immediately, but at lower rates and with a 150-day shelf life.

Short-term inflation pressure eases, but long-term trade policy just got harder to forecast. Relief and confusion arrived in the same envelope.

The Dollar and the Deficit Feel It First

The dollar extended its slide on Monday, dropping nearly 12% since early 2025 and weakening sharply against haven currencies such as the yen and Swiss franc.

If refunds materialize alongside already elevated borrowing needs and ongoing quantitative tightening, the pressure on government financing compounds quickly.

Predictability Is What Markets Need Most

The original tariff framework was projected to generate roughly $300 billion annually over the next decade.

That revenue line is now in question, and what replaces it remains unclear.

Traders are caught between a short-term inflation tailwind and a longer-term fiscal headwind that keeps getting harder to measure.

Bond markets can absorb surprises, but they struggle with open-ended unknowns.

Until the refund question, replacement tariff scope, and revenue outlook are sharpened, expect volatility to fill the gap where clarity should be.

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Trade

Europe Just Froze Its Side of the Deal, and U.S. Exporters Feel It First

The European Parliament has suspended legislative work on its U.S. trade agreement, and that pause has immediate consequences for American businesses counting on transatlantic access.

When a market of that size stops advancing trade commitments, the commercial pipeline slows from both ends.

Export contracts are delayed, procurement cycles stretch, and investment decisions tied to European demand drift into a wait-and-see mode.

U.S. Companies Lose Pricing Power in the Silence

European officials are demanding clarity before any further steps, and until that clarity arrives, American exporters face a widening credibility gap.

Competitors from Asia and Latin America do not need better products to win European contracts — they just need more predictable terms.

Every week of frozen negotiations gives rival suppliers time to lock in deals that would have gone to U.S. firms under normal conditions.

Market share lost during trade pauses rarely comes back quickly.

The Cost of Allied Hesitation Adds Up Quietly

The EU is not retaliating with new tariffs or sanctions — it is simply waiting. But economic stillness between the world's two largest trading blocs carries its own weight.

Cross-border investment slows, joint ventures stall, and the services trade that runs beneath the headlines loses momentum without anyone noticing until quarterly earnings land.

The U.S. economy thrives on open channels with allied markets. When those channels go quiet, the drag is real, even if it never makes a headline.

Metrics to Watch

• The 150 Day Tariff Countdown
  The big tell is whether this stays truly temporary or becomes a bridge to something more permanent.
  
  Watch for signals about an extension, a replacement plan, or another legal route that keeps tariffs sticky.
  
  

• Exemptions and Carve Outs
  The exemptions matter as much as the headline rate.
  
  If critical minerals, certain pharmaceuticals, and USMCA compliant goods stay protected, the pain will be uneven and the winners will look boring but stable.
  
  

• Price Pass Through at the Register
  Watch the everyday stuff that moves fast, like appliances, furniture, and cars.
  
  If prices keep creeping up, inflation can cool slower than people expect, even if the headline number looks calm.
  
  

• Supply Chain Rerouting
  Listen for companies talking about shifting sourcing, pulling forward shipments, or reworking contracts.
  
  When tariffs change suddenly, logistics gets louder before profits do.
  
  

• Trade Flow Direction
  Mexico taking the top spot as a destination for U.S. exports is a reminder that regional trade links still matter.
  
  Watch whether the data shows more North America pull and less overseas stretch.

Market Movers

⚖️ Courts Said No, Policy Said Watch Me
The ruling did not end tariffs, it just changed the legal plumbing.

That keeps uncertainty high, which usually favors quality balance sheets and companies that can plan through messy rules.

⏳ A Tariff with a Timer Changes Behavior Fast
A 150 day window encourages front running. Companies rush shipments, inventories swell, and pricing decisions get made earlier than normal.

That can create short bursts of strength followed by payback.

🚚 Trade Partners are Bracing, Not Relaxing
Overseas governments are not betting on a tariff truce.

Expect more negotiations, more hedging, and more corporate plans built around the idea that tariffs are a recurring feature, not a one off event.

🏭 Growth Looks Uneven Across Regions
Business activity has been cooling a bit in the U.S. while parts of Europe have been picking up.

If that gap widens, markets may start rewarding firms with better overseas demand and punishing those tied to higher input costs at home.

Market Impacts

Equities: Stocks caught a relief bounce after the Supreme Court struck down a big chunk of the emergency-tariff playbook, even with growth data coming in softer than expected.

The market is treating this like a quick cost-pressure reset, but it also knows another tariff headline could land at any moment.

How to play it: Keep your core in quality companies that can defend margins if costs swing again.

Add on boring red days, and be careful chasing anything that only works if trade policy stays quiet.

Bonds: Yields edged higher even with slower GDP, mostly because inflation is still hanging around and fiscal worries are not going away.

If tariff revenue gets messy, deficit math gets louder, and bonds will react to that too.

How to play it: The two to five year zone still gives you income without as much drama. Keep a small long-bond hedge for growth scares, but do not bet the farm on one macro storyline.

Currencies: The dollar dipped after the ruling, then bounced around as traders tried to price the next policy move.

When tariffs, refunds, and geopolitics are all in the mix, FX turns into a mood meter that changes fast.

How to play it: Keep horizons short and respect volatility. A calmer trade outlook can soften the dollar, but one risk-off headline can flip it right back.

Commodities: Gold moved higher on softer growth and rising uncertainty, which is basically its favorite environment.

Oil stayed supported by Middle East risk, even though the broader market is still well supplied.

How to play it: Treat oil as a headline trade until tensions cool meaningfully. Keep gold as insurance, but size it so you can hold it through normal pullbacks.

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Key Indicators to Watch

• Fed Governor Christopher Waller Speaks (Mon, Feb. 23, 8:00 a.m. ET) - Markets will listen for how confident the Fed is about inflation cooling and whether cuts are still on the table for mid-year. A firmer tone can lift yields and the dollar.
  

• Factory Orders (Mon, Feb. 23, 10:00 a.m. ET) - A clean read on demand for big-ticket goods. Strength supports industrials and cyclicals. Weakness backs the slower growth narrative that tends to help bonds.
  

• Consumer Confidence (Tue, Feb. 24, 10:00 a.m. ET) - This is the vibe check for spending. Rising confidence usually supports discretionary and travel. A drop signals households are feeling the pinch again.
  

• Case-Shiller Home Price Index (Tue, Feb. 24, 9:00 a.m. ET) - A reality check on housing. Cooling prices help affordability over time. Sticky prices keep pressure on buyers and can drag on housing-linked activity.
  

• Wholesale Inventories (Tue, Feb. 24, 10:00 a.m. ET) - Inventory trends hint at whether businesses are building stock on purpose or getting stuck with it. Rising inventories can signal future discounting. Lean inventories can support pricing power.

Everything Else

• ⚖️ The Supreme Court tariff ruling landed with a bunch of real-world consequences, and these five takeaways are the parts markets will keep circling back to.

• 📈 The latest PCE report showed inflation warmed up in December, which keeps the Fed in patient mode even if growth cools.

• 🧊 The Great Resignation is officially over, and workers have fewer reasons to job-hop now that incentives dim.

• 🏠 New home sales slipped in December, but inventory also fell, which is basically the housing market saying pick a struggle.

• 🔥 A separate read on PCE inflation also pointed to a hotter December, keeping the inflation debate very alive.