SCOTUS Tariff Decision Risks for Fixed Income, Concerns in Credit Markets

• The SCOTUS ruling on IEEPA tariffs means tariffs will continue in a different form, introducing uncertainty but not a major shift in the 10-year Treasury yield.
• Treasury market moves are primarily driven by inflation and economic outlook; inflation remains above the Fed's 2% target for five years, keeping yields elevated.
• The economy continues to 'chug along,' suggesting a floor on how much lower Treasury yields can go, combined with Fed policy as a key driver.
• Concerns in private credit markets are noted, but spreads haven't blown out, indicating no 'major warning' yet for broader credit markets.
• For riskier investors, high-yield and investment-grade corporate bonds still offer appropriate income, but conservative investors should be cautious.

Cooper Howard discusses the impact of the SCOTUS tariff decision on fixed income markets, noting that while tariffs aren't going away, the market reaction has been muted due to existing uncertainties. He highlights persistent high inflation and a resilient economy as factors preventing significant drops in Treasury yields, suggesting a floor. Credit market jitters are present but not yet a major concern, with high-yield and investment-grade corporate bonds still offering attractive income for risk-tolerant investors.