Greetings,

Tariff plot twist: An appeals court yesterday said the Trump administration can continue collecting 10% import tariffs, temporarily staying a ruling by the Court of International Trade that found the tariffs unlawful. More on that below.

Also in this edition:

• Wall Street's long-term inflation expectations rise to 2.7%
• CME to launch GPU compute futures market
• Middle East war, volatility dampen credit markets in Q1
• AI adoption in finance, accounting shows mixed results

The US Court of Appeals for the Federal Circuit has granted a temporary stay on a US Court of International Trade ruling that deemed the Trump administration's 10% tariffs unlawful. The tariffs, imposed under Section 122 of the Trade Act of 1974, will remain in effect while the appellate court considers the administration's appeal.

Ken Hullings, EVP Client Success - Institution Channel at LPL Financial, discusses the state of the financial advisory industry and outlines key findings from LPL's third annual Institution Benchmark Report. This year's findings reveal a critical vulnerability: despite strong year-over-year growth; just 20% is organic, leaving most institutions exposed to market shifts and advisor turnover that they cannot control. Hullings details four key trends firms should embrace to prepare for the future and also shares his bold predictions about how the advisory industry will evolve in the next year.

CME Group and Silicon Data are launching a futures market tied to graphics processing unit pricing, allowing traders to hedge exposure to rising AI-driven computing costs amid surging semiconductor demand. The contracts will reference standardized GPU price indexes, reflecting the growing financialization of AI infrastructure as chip and memory costs climb amid rapid data center expansion.

Wall Street is increasingly concerned about long-term inflation as expectations rise, with the five-year break-even rate reaching 2.7% and the 10-year rate hitting 2.5%. The latest consumer price index release has exacerbated these worries, leading to a decline in tech stocks and a rise in Treasury yields. The surge in inflation expectations is primarily driven by higher oil prices, posing challenges for the Federal Reserve's interest rate policy.

The war in the Middle East has led to increased market volatility and uncertainty, affecting credit markets in the first quarter. Institutional loan volume reached $173.3 billion, a decrease from the previous year, and high-yield bond issuance totaled $79.7 billion at an average yield of 7.08%. The Federal Open Market Committee paused rate cuts amid rising input prices and geopolitical tensions.

AI is widely adopted in finance and accounting, but results vary depending on how the technology is applied, according to recent surveys from KPMG and Progress ShareFile. Finance leaders report significant ROI in planning and forecasting, while accountants face workflow inefficiencies and integration challenges.

The Association of International Certified Professional Accountants has introduced the AI Accelerator Skills Program to enhance AI proficiency among finance professionals. The program, piloted by KPMG, Cisco and Stanley Black & Decker, offers three tiers of learning to cater to various roles, from CFOs to accountants.