Tariffs imposed under the International Emergency and Economic Powers Act (IEEPA) account for about 9.5pp of our estimated 14.7pp effective tariff rate after the reduction in fentanyl tariffs on China. Therefore, the Supreme Court's decision could have important implications for activity, inflation, deficits, debt, interest rates, and the dollar. We discuss risks and scenarios after the oral hearings.

As expected US Treasury maintained nominal coupon sizes unchanged but also did not guide towards higher bill share. Instead guidance suggests appetite to grow coupon supply in 2027. We discuss scenarios and implications for the US rate and spread curve.

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