The U.S. Supreme Court rejects IEEPA tariffs; U.S. Q4 consumption slows down while investment accelerates; AI is overly optimistic in expectations---0223 Macro Dehydration

SnapshotLaborer · 2026-02-23T17:45:59+00:00

The U.S. Supreme Court has ruled that the Trump administration's tariff hikes are illegal, losing an important trade tool. In Q4 2025, U.S. GDP unexpectedly declined to 1.4%, with mixed performance in consumption and investment. Emerging market stocks and cyclical assets rose, and funds shifted toward value stocks.

SnapshotLaborer

2026-02-23 17:45:59

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The U.S. Supreme Court has dismissed the Trump administration’s tariffs imposed under the International Emergency Economic Powers Act (IEEPA), a ruling that deprives the U.S. government of an important tool for trade pressure. Regarding China, this decision nullifies the 10% general tariff and the 10% fentanyl tariff.
In Q4 2025, U.S. GDP unexpectedly declined to 1.4%, with consumer spending slowing due to new vehicle sales, but service consumption provided support; private investment accelerated, AI-related investments rebounded, and residential investment’s decline narrowed; import and export growth both slowed, trade deficit narrowed, and government investment and consumption growth turned negative.
Emerging market equities, the Australian dollar, and cyclical assets such as U.S. capital goods generally rose, benefiting from the warming U.S. economy, with room for further global valuation increases for these assets. Funds are shifting from expensive tech stocks to cheaper cyclical exposures, driving value stocks to outperform growth stocks.

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