The Court Giveth, the Executive Taketh Back
The Court Giveth, the Executive Taketh Back
February 21, 2026
So the tariffs are dead. Long live the tariffs.
By now you've seen the headline: the Supreme Court, in a 6-3 decision handed down Friday morning, ruled that the President never had the legal authority to impose the sweeping IEEPA tariffs that have been throttling global trade since "Liberation Day" last April. Chief Justice Roberts authored the majority. The logic was almost derisive in its simplicity — no President has ever invoked this statute to impose tariffs of this magnitude and scope. The court didn't need to stretch. The legal overreach had always been that obvious.
Markets did what markets do. The S&P 500 surged to session highs. Nasdaq sprinted. Amazon, Meta, Google — major importers all — led the charge, because of course they did. Silver ripped 7.5%. Bitcoin briefly touched $68,000 before collapsing back to $67,000 like a drunk man who remembered he had somewhere to be. Then the President called it a "disgrace" and announced a backup plan — a fresh 10% global tariff — and the whole rally deflated into a kind of bewildered exhaustion.
That's the whole story, really. A constitutional rebuke of historic proportion, followed within hours by a workaround. The courts close one door; the White House grabs a crowbar and starts on the wall.
Here's what everyone is tiptoeing around: the refund question.
The Court didn't address it. Didn't want to touch it. Justice Kavanaugh, in dissent, practically begged someone to notice — the Government should go about returning the… — and then the sentence ends, because apparently even dissenting justices run out of appetite. What's sitting in the gap is somewhere between $133 billion and $175 billion in duties collected from American importers since last spring. Costco has already filed. Hundreds of others have too. The Treasury now has to figure out, without any court guidance, how to process what could be the largest involuntary fiscal transfer in modern American history.
Some traders are calling it "accidental stimulus." VanEck's fixed income team went further — if tariff revenues evaporate and refunds flow out, the fiscal gap widens, the deficit swells, and someone will have to print. That's the Bitcoin thesis right there, spelled out in a Supreme Court opinion. The irony is staggering.
Meanwhile, the macro data on Friday was doing its own thing, largely ignored amid the judicial theatre.
Q4 GDP came in at 1.4%. Wall Street had penciled in 3%. The government shutdown, apparently, was the culprit — drain the function out of the state and economic activity slows, who knew. Core PCE landed at +0.4% month over month, the hottest in months. So we got slower growth and hotter inflation on the same morning as a landmark tariff ruling. Stagflation's shadow, dressed up in a trench coat, trying to sneak past the headline writers.
The Fed, which has been sitting on its hands since January's pause, now has to stare at a genuinely uncomfortable combination: a GDP print that whispers "cut," an inflation reading that shouts "don't you dare," and a trade policy that just became a constitutional crisis pending a congressional override. This is not the environment in which you confidently do anything. Expect the FOMC to communicate nothing useful for at least six weeks.
Bond yields held. The dollar strengthened. Safe-haven demand, yes, but also the arithmetic of a world that doesn't know whether it's in a trade war, a legal standoff, or both simultaneously.
Let's talk about crypto for a moment, because the reaction deserves an honest read.
Bitcoin's initial spike to $68,000 wasn't conviction — it was reflex. The kind of price movement you get when algorithms read "tariffs struck down" and immediately bid risk assets before any human can form a coherent thought. Then reality settled in: the tariffs were struck down and immediately replaced with new tariffs. The debasement narrative — no tariff revenue means more printing means BTC goes up — is intellectually coherent, but it's a slow burn, not a catalyst. You don't re-price a store of value thesis in a Friday afternoon session.
Ethereum sits at $1,970. Solana gained 4% to $85. XRP is at $1.43. The market cap is $2.4 trillion, up a polite 1.3% on the day. ETF flows told a more honest story: Bitcoin spot ETFs bled $165 million in outflows, Ethereum another $130 million. Whatever the headlines said, the institutional money wasn't rushing in.
The Fear & Greed index is at 8. Extreme fear. That number will mean something eventually — it always does — but timing it is a fool's game.
The Brent crude situation is worth watching quietly. It crept to nearly $72 a barrel Friday, a new 2026 high, on Iran tensions that refuse to resolve. The administration has given Tehran a two-week deadline and hasn't been shy about mentioning military options. Oil markets are pricing in two scenarios — deal or limited strike — and betting that Iranian infrastructure comes through either way. That calculus could be wrong. It's been wrong before.
The VIX remains above 20. It has been there more days than not this year.
Next week brings NVDA earnings on Wednesday, and the market will perform its quarterly ritual of treating a single company's guidance as a divine signal about the entire trajectory of artificial intelligence, capital expenditure cycles, and the meaning of technology itself. Nvidia's stock will move violently regardless of the number. If the print disappoints even slightly, the software selloff — already brutal for anything without proprietary data moats — will intensify. If it beats, the Magnificent Seven narrative gets a shot of adrenaline it desperately needs after this week.
Home Depot reports Tuesday. That one's quieter but maybe more revealing — it'll tell you something about what's actually happening to the American consumer in a world where import costs may be in flux, mortgage rates are still punishing, and confidence is doing whatever Consumer Confidence surveys think confidence does.
The week ends with a kind of unresolved dissonance. A judicial branch that checked the executive. An executive that shrugged and reached for a different lever. An economy that printed stagflationary data and was largely ignored because a courtroom drama ate the news cycle. Crypto that briefly pretended to be excited and then went back to its corner. Precious metals doing things that would have seemed insane eighteen months ago — silver above $80, gold still hovering near historic highs after its spectacular February volatility.
Nothing is resolved. Almost nothing is clear. The one certainty is that the trade policy environment will remain chaotic regardless of what any court says, because the person setting the policy has made the rules of the game the point of the game.
Trade accordingly.
Nothing here is investment advice. These are observations, not recommendations. Do your own thinking.
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