Good morning. Let’s get into it.
For months, the trade has felt automatic. Dollar down, gold up, small- and mid-cap up. Rinse and repeat.
Now, the dollar is catching a bid even when the headlines say it shouldn’t. The tariff sequence was the perfect stress test.
On Friday, Feb 20, the Supreme Court ruled Trump’s IEEPA-based global tariffs were unlawful, and the dollar initially sold off. But the move didn’t stick. It reversed and finished stronger anyway, even as the administration moved to replace the struck-down IEEPA tariff regime with a new temporary global levy under a different authority.
At the same time, the 10-year has gone bid.
Even in private credit, liquidity is getting tighter. Blue Owl (a large private-credit manager) recently limited withdrawals in one of its retail credit vehicles to manage redemptions.
And in public markets, you can see the same thing in HYG/LQD rolling over.
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