In this week’s Steady Investor, we unpack timely headlines and market indicators that could shape your next financial move—such as:
Federal Trade Court Delivers Setback to U.S. Tariff Policy – A federal trade court issued a landmark decision on Wednesday limiting the executive branch’s ability to impose broad-based tariffs under the “International Emergency Economic Powers Act (IEEPA).” The IEEPAA is a law typically used to target foreign assets in times of national emergency, which the court ruled does not apply to trade deficits. The court stated that trade deficits and economic imbalances do not meet the threshold of “unusual and extraordinary threats” as defined in the statute, concluding that the use of IEEPA in this context overstepped constitutional boundaries by effectively granting unchecked tariff-setting powers to President Trump. While the immediate market reaction was positive—equity futures rallied on the news—the broader impact of the ruling could be significant. If upheld, it may force future administrations to rely on either Congress or more narrowly defined trade laws, such as Section 301 of the Trade Act, to justify tariff measures. It also introduces greater legal scrutiny to the use of emergency powers in economic policy, potentially curbing the scope of unilateral trade actions in the years ahead.
For investors, the outcome reinforces the value of monitoring not just economic indicators but also the legal and institutional frameworks that underpin trade and fiscal policy. In cases like this one, the worst outcome of punitive tariffs on all trading partners may not be realized for legal reasons.1
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Fed Survey Shows How Most American Households are Doing Financially – Despite persistent concerns about inflation and economic direction, most Americans reported financial stability at the end of 2024, according to the Federal Reserve’s latest Survey of Household Economics and Decision-making (SHED). Roughly 73% of U.S. adults said they were “doing okay or living comfortably” financially, which was unchanged from 2023 but still below pre-pandemic highs.While overall economic sentiment remains muted, we’re starting to see signs of incremental improvement. The share of adults describing the economy as “good” or “excellent” rose to 29%, up from 22% the previous year, although well below the 50% who felt that way in 2019. Meanwhile, the percentage of people who felt worse off than the year before declined to 29%, continuing a two-year downtrend from a peak of 35% in 2022.Most Americans are still feeling the pinch of inflation, particularly when it comes to food, groceries, and housing. Just 63% said they could cover a $400 emergency expense with cash or its equivalent—a figure consistent with prior years but still highlighting the vulnerability of many households. Rent inflation remains a key pain point, with median rents up roughly 10% annually since 2022.
Taken together, the report paints a picture of a consumer base that is financially intact but psychologically cautious. From an investment standpoint, this disconnect between relatively healthy fundamentals and muted public sentiment suggests a meaningful opportunity: if reality continues to surprise expectations to the upside, there may be more resilience in both the economy and markets than widely assumed.3
Fed Minutes Show Cautious Stance in Light of Tariff Risks – Minutes from the Federal Reserve’s May meeting revealed a cautious tone among policymakers, driven by concerns that recent shifts in trade and fiscal policy—particularly tariffs—could reaccelerate inflation. While economic growth was described as “solid” and the labor market “broadly in balance,” officials acknowledged a growing risk that inflation could persist even as employment and output soften.
This potential mismatch—higher prices alongside slowing demand—would force the Fed into a difficult balancing act. Policymakers noted that such tradeoffs could complicate progress toward their dual mandate of stable prices and full employment. As a result, the Fed reiterated its intention to wait for greater clarity before lowering rates further. For investors, it’s clear the Fed remains in wait-and-see mode, and any future rate decisions will hinge not only on economic fundamentals but also on the evolving policy landscape. Markets expecting near-term cuts may need to recalibrate, as the central bank appears willing to stay patient in the face of uncertainty.4
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