Supreme Court nixes tariffs, Trump teases 15% global tariff

Policy shock, uncertainty remains

On February 20th, the Supreme Court ruled that Trump’s global tariffs under IEEPA authority were unconstitutional, effectively nullifying the framework. However, the relief was short-lived. Within hours, Trump floated a 15% blanket tariff under an alternative legal authority.

Markets initially responded with risk-on relief, but hesitation quickly followed. The policy shock removed one layer of uncertainty, only to replace it with another.

With fundamentals still murky, the next directional signal is going to hinge on how the Dollar Strength Index itself performs.

DXY coils up: 99.3 and 96.5 in focus

Technicals of the DXY are simple right now: Some may say it’s in an ascending triangle, while others are eyeing a possible rotation to a monthly trendline, at around 96.5.

In short:

• A break above 98 can help the greenback revisit previous highs at 99.3.
• A break below a local trendline can see a decline to 96.5, near January lows and a multiyear trendline.

A macro view shows key critical levels at approximately 92, 100, and 103.

Rates at an inflection: 3.50% vs 4.20%

This is where it gets interesting.

The 2-year yield is leaning on near-term support around 3.45–3.50%. On the weekly chart, the 20-week EMA has crossed below the 200-week EMA, and yields are still capped beneath that long-term average, suggesting momentum has cooled.

The 10-year yield is holding trend structure, but 4.20% remains firm resistance. After pulling back toward ~4.07%, the market is deciding whether the next move is a re-acceleration in inflation pressure or a drift toward growth caution.

Think of it this way:

• The 2Y reflects Fed policy expectations.
• The 10Y reflects macro confidence and inflation risk.

If 2Y holds above 3.5% and 10Y reclaims 4.20%:

 → Financial conditions stay firm.
→ Dollar breakout toward 99.3–100 becomes more likely.

If 2Y breaks below 3.5% and 10Y slips under 4.00%:

 → Easing expectations accelerate.
→ DXY likely rotates toward 96.5 first, with 92 only in play on deeper breakdown.

Rates are compressing just like the dollar. When they resolve, DXY likely resolves with them.