Policy hammer suddenly reverses, Finance Minister's tariff move directly targets the market

Recently, U.S. policy directions have suddenly taken a sharp turn. The market’s optimistic expectations about the Supreme Court’s ruling were instantly dashed after the Treasury Secretary’s statement. The power of this policy hammer may be far greater than investors imagine.

Why the Tariff Policy Changes Suddenly After the Supreme Court Ruling

On the surface, the Supreme Court’s decision on Trump’s tariffs seemed to open the possibility of refunds. Billions of dollars in corporate tax refund applications are queued for approval, and the entire market is waiting for these “refunds to resolve the crisis.” But Treasury Secretary Yellen’s subsequent statement completely changed expectations—after months of study, the government not only refuses to revoke the tariffs but is also prepared to increase them further.

What does this mean? Companies applying for refunds should be prepared for a long wait. The Treasury explicitly stated that these cases could be “delayed for weeks, months, or even years” in the judicial system. In other words, this is a direct challenge to market sentiment—don’t think winning a lawsuit means winning the market; the real test is just beginning.

Inflation Pressures Return: Is There Still a Chance for the Fed to Cut Rates?

From an economic logic perspective, increasing tariffs directly leads to higher costs for imported goods, putting pressure on consumer prices. This creates a new dilemma for the Federal Reserve’s monetary policy. If inflation expectations rise again, the Fed’s plan to cut rates in 2026 will be in question. Historically, the stock market under high interest rates is volatile, especially tech stocks which are more vulnerable.

Cryptocurrency markets tend to react with a lag but with intensity. When risk assets are broadly out of favor, Bitcoin and mainstream coins usually decline before traditional assets. Current data shows AGLD has fallen 13.12% in the past 24 hours to $0.23, reflecting market concerns over policy uncertainty. Conversely, PAXG (gold token) has risen 2.80% to $5,390, indicating that safe-haven funds are quietly shifting.

Market Signals from Three Asset Classes

In the current environment, different assets are sending conflicting signals. PIPPIN has risen 2.90% in 24 hours to $0.60, indicating some funds are still seeking growth opportunities. But this divergence is typical of high-risk periods—large capital is diversifying, and small investors are more likely to get caught off guard.

The policy hammer has fallen, and the next few months will determine market direction. If tariffs are gradually increased, inflation data will start to emerge in spring, possibly forcing the Fed to delay or cancel rate cuts.

How to Approach Investment in the Coming Months

In this context, decision-making becomes especially critical. Aggressive investors might see policy shocks as buying opportunities, patiently waiting for market sentiment to recover. Conservative investors should be alert to the risk of further policy hammer blows and gradually adjust their positions.

The key is to understand that this is not a short-term game but a deep structural change in the policy environment over the coming months or even years. The impact of the policy hammer is gradually transmitting from corporate earnings to asset prices. Smart investors should think two steps ahead.