Inside Markets — Near-Term Risk Event

A Supreme Court decision to strike down IEEPA tariffs could cause a short squeeze for heavy importers and a potentially dangerous spike in bond market volatility. Given some time, the administration would likely find a more sustainable justification for tariffs, but striking down IEEPA would cause the Treasury to temporarily lose a source of welcome revenue. The perceived loss could cause a spike in longer-dated bond yields and spike in bond volatility that could then spill into equity markets.