The US supreme court declared many of Donald Trump’s tariffs illegal on Friday, in a sharp rebuke that topples a key pillar of the president’s aggressive economic agenda.

In a 6-3 ruling, the court decided that a 1977 law designed to address national emergencies did not provide the legal justification for most of the Trump administration’s tariffs on countries across the world. It is the first time the court has overruled one of Trump’s second-term policies.

Trump reportedly called the ruling “a disgrace” while hosting a White House breakfast with governors.

The ruling was a significant blow for one of Trump’s boldest assertions of executive power since his return to the White House. Trump has used tariffs to aggressively reshape US trade policy, upending decades of agreements and collecting tens of billions of dollars from companies importing foreign goods. (Guardian – Continue Reading)

President Trump announced on Friday that he would impose a new, across-the-board 10 percent tariff on U.S. trading partners, part of a series of steps meant to preserve his trade war now that the Supreme Court has declared many of his most punishing duties illegal.

Striking a defiant note even in legal defeat, Mr. Trump asserted at a news conference that he remained unbowed and would take advantage of other federal laws in a bid to duplicate the steep taxes on imports that the justices have invalidated.

For one thing, Mr. Trump said he would invoke a portion of law known as Section 122, which no president has ever used, to impose a 10 percent global tariff starting in a matter of days. Separately, the president said he would use a second set of authorities, called Section 301, to open investigations into certain, unspecified countries’ unfair trade practices. (NY Times – Continue Reading)

The government shutdown was more of a drag than predicted while the trade story failed to provide the anticipated boost. Nonetheless, the underlying consumer and investment data remain firm. However, there is a lack of breadth within those two components, with technology investment and high-income consumers driving activity forward

We've had quite a surprising set of US numbers today with fourth-quarter 2025 GDP recording growth half of what was predicted (1.4% QoQ annualised versus the 2.8% consensus). Meanwhile, the Fed's favoured inflation measure, the December core PCE deflator, was hotter at +0.4%MoM/2.9%YoY (consensus 0.3%/2.8%).

It was only at Davos that the members of the Administration were touting the prospect of a 5%+ 4Q GDP print, but this always looked optimistic as it was based off the Atlanta Fed’s GDPNow metric that was predicated on a remarkable October trade report being replicated in November and December. That didn't happen with imports bouncing back in the final two months of the year. In the end, net trade only contributed 0.1pp to headline growth. The six-week-long government shutdown was a major drag with a 16.6% annualised drop in Federal government spending subtracting 1.15pp from the headline growth rate. Outside of that, consumption was a respectable 2.4% annualised growth with investment rising 3.8% even with residential investment falling for the fourth straight quarter. (ING – Continue Reading)

Volatile monthly data showed high street spending picked up sharply at the start of the year. However, the underlying picture tells a far more restrained story.

The Office for National Statistics (ONS) said headline retail sales surprised to the upside, rising 1.8% m/m in January, the largest increase since May 2024. The figure was sharply higher than the 0.2% forecast and December’s 0.4% gain. On an annual basis, sales jumped 4.5%, well ahead of the 2.8% forecast and a marked pick-up from December’s downwardly revised 1.9% rise.

Excluding fuel, sales grew 2.0% on the month, outperforming the 0.3% estimate and the prior reading. Core sales rose 5.5% y/y, well above the 3.6% expectation and December’s negatively revised 2.5% print.

Statisticians said auctions of items such as artwork and antiques drove volumes, suggesting gains were driven by narrow factors. Online retailers also saw a boost in sales, particularly jewellers, which reported unprecedented levels of demand. Department stores, food and household goods sales partially offset the gains. (LiveSquawk – Continue Reading)

Managers in Germany are expected to express more optimism about their lot just days after a report showed domestic manufacturing returning to growth for the first time since mid-2022.

An economists’ poll said the headline business climate index for Germany due Monday from the country’s Ifo economics institute was forecast to increase to 88.3 points from 87.6, the reading for December and January and the lowest mark since May.

The expectations measure of the index for the coming six months is projected to improve to 90.0 points from 89.5, with January’s current assessment reading set to rise to 86.2 versus 85.7 in the previous month.

Friday’s US Supreme Court decision to strike down much of President Donald Trump’s global tariffs could play a minor role in the results, depending on how many respondents had already submitted their questionnaires ahead of Monday’s report. (LiveSquawk – Continue Reading)

President Donald Trump said Friday that he is considering limited military strikes to pressure Iran over its nuclear program.

“I guess I can say I am considering that,” Trump said when asked by a reporter at a White House breakfast with U.S. governors.

Trump said Thursday that he would make a decision in the next 10 to 15 days on whether to attack the Islamic Republic. He has left open the possibility that a deal could still be reached with Tehran over its nuclear program.

Trump has previously said an attack on Iran would be “far worse” than the limited strikes launched by the U.S. in June against its nuclear facilities. (CNBC – Continue Reading)