The Supreme Court has finally ruled on Donald Trump's tariffs with an opinion that the president has no right to impose tariffs under the International Emergency Economic Powers Act. So what happens now?

Deputy Chief North America Economist Stephen Brown and Deputy Chief Markets Economist Jonas Goltermann join The Weekly Briefing from Capital Economics to discuss the implications of this legal ruling for the US economy, for Federal Reserve policy and for financial markets. In their conversation with David Wilder, Stephen and Jonas address key issues, including:

• How the White House could rebuild its tariff regime – and rebuild it quickly
• What happens when billions of dollars in tariff refunds flow back into US company accounts
• Why signs of resurgent inflationary pressures are narrowing the room for Fed rate cuts
• How the bond market is responding to the Supreme Court news
• Why the stock market rally has stalled, and whether this news could get it going again.

Related reading

IEEPA ruling unlikely to pull PCE inflation back to 2%
https://www.capitaleconomics.com/publications/us-economics-weekly/ieepa-ruling-unlikely-pull-pce-inflation-back-2

Stock market rotation is a warning of trouble ahead
https://www.capitaleconomics.com/publications/capital-daily/stock-market-rotation-warning-trouble-ahead

SC rules that Trump's IEEPA tariffs are illegal
https://www.capitaleconomics.com/publications/global-economics-rapid-response/sc-rules-trumps-ieepa-tariffs-are-illegal

From the lows of December retail sales to the highs of January payrolls, recent US data has sent mixed signals. But the economy remains in relatively good shape, argues Deputy Chief North America Economist Stephen Brown on the latest episode of the Capital Economics Weekly Briefing. He explores why the idea of a “K-shaped” economy may be overstated, what markets are missing about the productivity growth upturn, and the chances of much lower rates from a Kevin Warsh-led Fed.

Also on the show, as Keir Starmer’s government reels from one of its toughest weeks yet, Deputy Chief UK Economist Ruth Gregory assesses what a change of leadership could mean for the UK economy and financial markets, but also why the long-term growth outlook may not be as bleak as recent headlines suggest.

Related reading:

AI already making a big contribution to US productivity growth
Why we still believe in the AI rally, and the S&P 500
Would a stock market crash cause a global recession?
Can China’s trade surplus rise further?

Get in touch at podcast@capitaleconomics.com to learn more.

In this week’s episode, Neil Shearing talks to Vicky Redwood and John Higgins about a tumultuous week in equity markets, how AI is creating winners and losers, and whether there’s any evidence that AI is starting to lift productivity growth in economies.

AI already making a big contribution to productivity growth
China’s AI rollout could rival the US