Global markets are positioned to look beyond the US Supreme Court's ruling on Trump's emergency tariffs, with any sustained impact unlikely despite potential short-term market swings, according to Neeraj Seth, Founder and CIO of 3R Investment Management.

Market Outlook on Supreme Court Decision

Seth emphasized that while US markets may experience knee-jerk reactions to the Supreme Court's tariff ruling, the broader market fundamentals suggest limited long-term consequences. Markets are currently monitoring three potential outcomes from the court's decision: partial strike down of tariffs, complete elimination, or no changes to the current structure.

Investors are particularly focused on assessing the timeline for alternative tariff implementations should the ruling favor opponents of the administration's policy. Seth noted that even if the Supreme Court strikes down the current tariffs, the administration retains legal pathways to reintroduce similar measures.

India Market Implications

For Indian markets, Seth anticipates short-term reactions driven by multiple supporting factors:

• Tax cuts implementation
• Expected earnings recovery trajectory
• Reduced tariff-related uncertainty
• Signs of rupee stabilisation

However, he cautioned that trade-related uncertainties connected to global agreements still require resolution before markets can achieve greater stability.

Asset Class Impact Analysis

Seth provided detailed insights on how different asset classes might respond to a potential tariff strike down:

"It's negative for the Treasury markets," Seth explained, pointing to the US fiscal deficit running close to $2.00 trillion. He emphasized that Treasury markets could face particular pressure as tariff revenues have been incorporated into fiscal planning.

Regarding equities, Seth expects mixed reactions across different sectors, with immediate negative pressure possible if long-term yields rise. Interest-rate-sensitive sectors are likely to experience more pronounced impacts compared to other market segments.

2026 Market Volatility Outlook

Looking ahead, Seth expects geopolitical risks to drive higher market volatility throughout the coming year. While global fiscal and monetary conditions remain supportive, he anticipates increased swings in asset prices during 2026, though these fluctuations may not necessarily alter the overall market direction.

The analysis suggests that while short-term market movements are expected following the Supreme Court's decision, the combination of legal alternatives, diluted tariff impacts, and strong underlying market fundamentals should help markets navigate through any immediate disruptions.

US President Donald Trump announced on Thursday a comprehensive $200 billion mortgage-backed securities purchase program designed to address mounting housing affordability pressures across the United States. The initiative, confirmed by Federal Housing Finance Agency Director Bill Pulte, will be executed entirely through government-backed mortgage finance firms Fannie Mae and Freddie Mac without involvement from the Federal Reserve or U.S. Treasury.

Financial Capacity and Implementation

Despite initial concerns about liquidity, both mortgage giants possess substantial financial resources to execute the ambitious program. The following table illustrates their current financial position:

Pulte emphasized that when broader balance sheet assets are considered, including securities held under resale agreements and restricted cash, each firm has access to approximately $100 billion in available funds. Fannie Mae reported approximately $101 billion in combined cash, restricted cash, and securities purchased under agreements to resell in the third quarter, while Freddie Mac held nearly $91 billion in similar assets.

Market Impact and Economic Context

The mortgage bond purchase program represents a significant intervention in the housing market, though economists suggest its impact may be measured rather than transformative. Key market dynamics include:

• Mortgage rates have declined from around 7.00% earlier in the year to the low-6.00% range
• Housing demand has shown limited signs of sustained recovery despite rate improvements
• Analysts estimate the bond purchases could lower borrowing costs by approximately 10-15 basis points

Strategic Approach and Funding Structure

Unlike the Federal Reserve's pandemic-era quantitative easing program, this initiative will not involve newly created central bank money. The transactions will be funded entirely through the existing balance sheets of Fannie Mae and Freddie Mac, marking a distinct approach to market intervention. Pulte declined to provide specific details regarding the timing or structure of the bond purchases but confirmed the agencies' commitment to executing the directive.

Broader Housing Policy Context

The announcement forms part of Trump's comprehensive approach to addressing housing affordability challenges. Recent related initiatives include restrictions on institutional investors purchasing single-family homes, with additional housing-related policies expected to be unveiled in the coming weeks. Housing affordability has emerged as a critical political and economic issue, with elevated home prices and high mortgage rates continuing to sideline potential buyers.

Historical Precedent and Market Role

Fannie Mae and Freddie Mac have remained under government control since their bailout during the 2008 financial crisis. These entities play a central role in the U.S. housing market by purchasing mortgages from lenders, thereby freeing up capital and supporting the availability of home loans. The proposed $200 billion purchase program echoes steps taken by the Federal Reserve during the pandemic, though economists note the scale would be modest compared to previous interventions and likely produce limited impact on overall mortgage rates.