Launch Pad

Clear as mud. Trump initially said he would raise the new global tariff to 10% and later increased it to 15% to preserve his trade agenda after the U.S. Supreme Court ruled his use of emergency powers for tariffs was illegal. The administration is now relying on alternative legal authority that allows temporary tariffs for up to 150 days without congressional approval, while also launching country-specific trade reviews that could lead to additional duties. The back-and-forth introduces fresh economic uncertainty, with potential legal challenges, retaliation from trading partners, and up to $170 billion in tariff revenue at stake depending on court outcomes. The ruling has cast doubt on recent trade progress, prompting the EU to consider freezing ratification of a pending deal and India to pause negotiations until U.S. policy becomes clearer.  

It’s complicated. The U.S. Supreme Court’s decision to strike down a broad set of Trump’s tariffs has created significant uncertainty for the Fed, complicating its outlook on inflation and interest rate policy. Fed officials believed tariff-driven inflation pressures would ease but now face uncertainty over whether they will be reinstated through other legal means, potentially prolonging inflation risks. This uncertainty makes it harder for policymakers to determine when or if interest rate cuts should resume, as businesses may delay hiring, investment, or pricing decisions while awaiting clarity. Officials are also concerned about disruptions related to potential tariff refunds and supply chain adjustments, which could stall economic activity. While replacement tariffs have already been announced, Fed officials have signalled that their baseline economic outlook may not materially change if tariffs ultimately stay at similar levels. 

Germany is showing some signs of economic recovery, with data pointing to improving business sentiment and renewed manufacturing growth for the first time since 2022. Adding to this, a stronger-than-expected 0.3% GDP expansion in late 2025 driven by consumer spending, government investment, and construction is helping the recovery. Rising factory orders and infrastructure and defense spending suggest momentum may continue, though economists expect only modest growth of around 0.8% this year, due to ongoing uncertainty tied to global trade tensions and tariffs. The outlook remains fragile, with upcoming data on business confidence, employment, and inflation expected to shed some light on whether the rebound is sustainable. Broader risks including potential leadership changes at the ECB and continued geopolitical and trade uncertainty could further influence both investor sentiment and policy direction. 

The UK too. Economic activity in the UK continued to recover earlier this year, with the composite PMI rising to 53.9 in February, its highest level since April 2024 and signalling ongoing expansion. Consumer spending showed strength, with retail sales recording its fastest annual growth in nearly four years, helped in part by demand for luxury and gold-related items. PMI data pointed to roughly 0.3% GDP growth in Q1, a jump from just 0.1% last quarter. However, the recovery remains uneven. Services sector firms continue to cut jobs due to higher labour costs and are directing more capital to technology instead of hiring. Inflation pressures also remain, with output prices rising at the fastest pace since last April, even as input cost increases have moderated. Overall, the mixed outlook of improving growth alongside persistent inflation and weak hiring is expected to keep the Bank of England on a gradual easing path, though policymakers remain divided on the timing and pace. 

Investors are rotating out of tech and megacap stocks amid concerns that AI could disrupt traditional software and tech business models, prompting a shift toward previously underperforming sectors. Technology, consumer discretionary, and financial stocks are negative year to date, while energy, materials, and industrials have risen, supported by rising oil prices and increased AI infrastructure investment. Defensive sectors such as consumer staples have also attracted inflows as investors seek stability amid market volatility. The tech selloff began with software companies and has spread to cybersecurity and other industries as markets assess AI’s potential disruption across sectors. Despite this rotation, strategists remain optimistic about broader market gains, expecting profit growth and potential Fed rate cuts to support equities and drive a more diversified rally beyond tech. 

Heartbreak. Repeating last year’s magic at Four Nations was always going to be a tall order, after Canada delivered the country what John Cooper called, a much-needed win. The tension, nerves, and passion in the gold medal game were palpable. It was a hard-fought effort by the boys in red, but the result was not the one Canadians hoped for. Like most contests at this level, it could have gone either way. A soft tip from Toews that stayed out and MacKinnon ringing one off the post on a near empty net were centimetres from changing the outcome. Instead, it was silver around the necks of a group that reflected both legacy and transition. Some veterans may have skated in their final Olympics, including Captain Canada, Sid-the-kid Crosby, who was sidelined with an undisclosed injury. At the same time, the next era was on full display, with Connor McDavid wearing the C in Crosby’s stead and 19-year-old Macklin Celebrini proving he belongs on the biggest stage. The result stings, but the foundation remains strong, and the future of Canadian hockey remains bright. 


Diversion: Gold medals for these folks 

Gold is getting a boost, following three consecutive weekly gains, as heightened uncertainty over U.S. trade policy unsettled markets and hurt the U.S. dollar. The Supreme Court decision could have implications for the U.S. government deficit as tariff revenues come under threat, as well as the country’s trade balance. The 15% tariff rolled out by the White House is meant to replace those the court invalidated, though it’s only permitted to last up to 150 days and in cases of fundamental international payments problems. Gold’s recent run of gains has helped the metal to recover ground following a sudden rout at the turn of the month, which had dragged prices down from a record. The advance has been helped by long-term factors including heightened geopolitical tensions and the debasement trade. However, the Commodity Futures Trading Commission data is showing that net-long position for gold futures have fallen to the lowest level in nearly a year.