What's Driving Markets...
1. Trump emergency tariffs deemed unconstitutional: In a 7-4 ruling, the Court of Appeals for the Federal Circuit upheld a prior ruling and rejected the broad usage of fentanyl and reciprocal tariffs under the International Emergency Economic Powers Act (IEEPA). In short, the court ruled that the tariffs constituted a tax, and therefore, taxation power belonged to Congress. This decision keeps the tariffs in effect until early October, but the Trump administration has filed an emergency appeal to the Supreme Court (SCOTUS). This is a closely watched legal process and has broad implications for US trade architecture and fiscal flows. While the Trump administration may seek relief with SCOTUS, it still has several other, albeit slower, tools for tariffs, such as Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974.

Important Risks: Investing involves risk, including the possible loss of principal. • Fixed income security risks include credit, liquidity, call, duration, and interest-rate risk. As interest rates rise, bond prices generally fall. • Investments in high-yield (“junk”) bonds involve greater risk of price volatility, illiquidity, and default than higher-rated debt securities. • Mortgage-related and asset-backed securities’ risks include credit, interest-rate, prepayment, and extension risk. The value of the underlying real estate of real estate related securities may go down due to various factors, including but not limited to strength of the economy, amount of new construction, laws and regulations, costs of real estate, availability of mortgages, and changes in interest rates. • Loans can be difficult to value and less liquid than other types of debt instruments; they are also subject to nonpayment, collateral, bankruptcy, default, extension, prepayment and insolvency risks. • Foreign investments may be more volatile and less liquid than US investments and are subject to the risk of currency fluctuations and adverse political, economic and regulatory developments. These risks may be greater, and include additional risks, for investments in emerging markets. • The risks associated with mortgage-related and asset-backed securities as well as collateralized loan obligations (CLOs) include credit, interest-rate, prepayment, liquidity, default, and extension risk. • Diversification does not ensure a profit or protect against a loss in declining markets.

The views expressed herein are those of Wellington Management, are for informational purposes only, and are subject to change based on prevailing market, economic, and other conditions. The views expressed may not reflect the opinions of Hartford Funds or any other sub-adviser to our funds. They should not be construed as research or investment advice nor should they be considered an offer or solicitation to buy or sell any security. This information is current at the time of writing and may not be reproduced or distributed in whole or in part, for any purpose, without the express written consent of Wellington Management or Hartford Funds.