“The Supreme Court decision will pave the way for accelerated rate cuts as inflation expectations from tariffs are now less of a factor,” Jamie Cox, managing partner at Harris Financial Group in Richmond, Va., told InvestmentNews.
“The looming question is what new authority the administration will use to salvage some of the tariff revenue,” he said.
The US Supreme Court ruled on Friday that President Donald Trump’s tariffs were illegal in a historic 6-3 ruling. The court deemed that the use of the International Emergency Economic Powers Act (IEEPA) was improper.https://t.co/r1Pz1ckjuw
— Mortgage Professional America Magazine (@MPAMagazineUS) February 20, 2026
Tariffs, deficits and the Fed’s next move
Jeff Buchbinder, chief equity strategist at LPL Financial, agreed that expectations of a Fed cut are now more sensitive to the tariff backdrop.
“We would fade a short-term bounce on the Supreme Court ruling because the Trump administration will quickly pivot to different legal grounds for replacement tariffs while deficits go higher in the interim. However, if lower tariffs help cool inflation, it could firm up expectations for Fed rate cuts later this year,” he said.
Bipan Rai, head of FX strategy at BMO Asset Management, called the initial market move “a knee-jerk reaction,” saying “the USD [is] lower and duration under a bit of pressure” after the ruling.
