Traders, meanwhile, were left without clarity on the legality of President Donald Trump’s levies as the Supreme Court held off Friday from issuing a ruling. An opinion against the tariffs, which have generated hundreds of billions of dollars in revenue and eased pressure on the US budget deficit, stands to weigh on Treasuries.
Traders have in mind a slump on Nov. 5, when arguments suggested the court was skeptical that Trump had authority to impose the levies under a 1977 law giving the president special powers during emergency situations.
Removing tariffs would likely “rekindle fiscal concerns, presenting a risk of higher long-term yields and steeper curves,” JPMorgan Chase & Co. strategists including Jay Barry wrote in a note this week. Still, any impact “should be fairly limited,” given the administration’s ability to pursue other routes to restore most levies, they said.
A Bloomberg gauge of the dollar rose as much as 0.3% to a session high as the court finished its opinion release for the day without a ruling on tariffs. The court could issue more opinions in the next two weeks as the justices have return from their holiday recess.
The stage is also set for the first Treasury coupon auctions of the year next week, including three- and 10-year notes. All of next week’s auctions fall earlier in the week than normal in order to conclude by their Jan. 15 settlement date, with the first ones on Monday. A reading of US inflation will follow on Wednesday.
