SCOTUS Drops the Hammer, the Fed Stalls, and AI Spooks Wall Street

Real Estate Insights. Success Mindset. One Step at a Time.

Issue #41 | February 25, 2026

The Supreme Court just rewrote the tariff playbook. The Fed can't decide which direction to move. AI is rattling CRE stocks. And through all of it, the dirt that matters is still the dirt with power.

Let's dig in.🐾 From The Dirt Up.

📊 Market Insights

SCOTUS Drops the Hammer, the Fed Stalls, and AI Spooks Wall Street

Three big stories collided this week. Each one changes the math for anyone touching dirt.

⚖️ The Tariff Shakeup

Last Thursday, the Supreme Court struck down Trump's sweeping IEEPA tariffs in a 6-3 decision. Two of the justices he appointed voted against him. The ruling was clear: the President doesn't have the authority to impose tariffs under the International Emergency Economic Powers Act.

Within hours, Trump signed a new executive order imposing a 10% global tariff under a different law (the Trade Act of 1974). Treasury Secretary Bessent says the revenue impact will be "virtually unchanged."

So what changed for us?

Here's the nuance the headlines are missing: The IEEPA tariffs that just got killed were the big reciprocal ones. But the tariffs on steel, aluminum, and copper? Those were imposed under different authority. They're still standing. If you're building anything with structural steel, those costs haven't budged.

Trepp estimates tariffs added roughly 4.6% to commercial construction project costs, hitting steel-intensive projects hardest. Some of that pressure may ease on specialty equipment, HVAC, and electrical systems. But don't expect a clean reset. The Associated General Contractors is already telling members not to hold their breath on refunds for materials purchased during the tariff period.

The real risk now? Uncertainty. The administration has already signaled it will pursue "alternative legal authorities" to rebuild the tariff wall. That yo-yo effect is what kills project timelines and makes lenders nervous.

🏦 The Fed's Identity Crisis

The Fed held rates at 3.50% to 3.75% at its January meeting. That wasn't surprising. What was surprising: the FOMC minutes released this week showed several officials openly discussed the possibility of raising rates if inflation stays sticky. Meanwhile, two governors dissented because they wanted to cut.

The market is now pricing in about a 43% chance of three or more cuts this year, up from 25% a month ago. January inflation came in at 2.4%, and the labor market surprised to the upside with 130,000 payrolls. Futures traders are betting on the first cut in June.

Translation: nobody knows. And that's fine. If your deal only works in one rate scenario, that's not a deal. That's a coin flip.

🤖 AI Rattles CRE Stocks (But Not CRE Fundamentals)

CBRE dropped nearly 13% in one session this month. JLL, Newmark, SL Green all sold off. The fear? AI replacing white-collar jobs means fewer people in office towers, and eventually fewer brokerage transactions.

Here's what the panic crowd missed: CBRE posted record earnings the same week its stock got crushed. CBRE projects CRE investment volume will climb 16% in 2026 to $562 billion. Data center vacancy is holding at 1% for a second straight year. And 64% of data center capacity under construction is in frontier markets, creating brand-new land demand in places nobody was looking five years ago.

Dirt Dawg Take: Three stories, one lesson. Tariffs shift. Rates wander. Stocks swing on emotion. But the fundamentals haven't changed: land with infrastructure, entitlements, and strategic clarity still wins. It won when rates were at 5%. It's winning at 3.5%. And it'll win no matter what headline drops next week. Your dirt doesn't read the news. Make sure your strategy doesn't either.

✨ The Alpha Effect

"Noise Is a Tax on the Unfocused"

SCOTUS kills tariffs on Thursday. Trump reimposed new ones by dinner. The Fed says maybe up, maybe down, maybe sideways.

And then the AI doomsday headlines land on your screen before your coffee gets cold.

You know what all that noise has in common?

None of it is doing your deal.

The market will always give you a reason to wait. To hesitate. To second-guess your underwriting. To scroll one more headline before you pick up the phone.

But the operators who win aren't the ones with the best predictions. They're the ones with the best positioning. They've already run their numbers. They already know what their dirt can do. They already have their exit strategy mapped and their capital partners on speed dial.

CBRE just posted record earnings the same week its stock got hammered by AI fear. Think about that. Strong fundamentals. Panic narrative. That gap between reality and perception? That's where alpha lives.

Tariff uncertainty will come and go. Rate decisions will wobble. Stock tickers will flash red. Your job isn't to follow the conversation. Your job is to be so clear on your position that the conversation becomes irrelevant.

Clarity is the antidote to noise. And noise is only expensive if you're paying attention to the wrong frequency.

🚀 One Step at a Time

Action Steps This Week

1. Reassess Your Construction Costs Post-SCOTUS

The reciprocal tariffs are gone, but the construction cost picture is messy. Steel, aluminum, and copper tariffs remain intact under separate authority. Specialty equipment and electrical systems may see relief. If you have a project in the pipeline, call your GC this week and ask: which line items were inflated by IEEPA tariffs, and which are still exposed? Don't assume costs drop automatically. Reprice what you can. Hedge what you can't. And don't count on refund checks for materials already purchased.

The AGC put it bluntly: don't hold your breath on getting money back.

1. Rate-Proof Your Capital Stack

The Fed might cut. It might hold. Some officials want to hike. Model all three. If your deal only works in one scenario, that's not a deal. That's a bet. Structure for flexibility: seller carry, phased draws, rate caps. Make your deal survive any headline.

1. Know Your Power Profile Before the Market Figures It Out

Data centers are eating dirt at a pace we've never seen. Vacancy is at 1%. The top five hyperscalers are projected to spend up to $400 billion on data center infrastructure in 2026 alone. And the single biggest constraint isn't demand or capital. It's power.

That means your land's value may have changed and you don't even know it yet.

Here's what to do this week:

• Call your utility provider. Ask about available capacity at the nearest substation, current load, and any planned upgrades or expansion timelines. In many markets, interconnection timelines are stretching to five to seven years. Knowing your position today gives you years of lead time over sellers who haven't asked.
• Map your proximity. How far is your site from the nearest transmission line, fiber corridor, and substation with spare capacity? These three distances are now as important as your zoning classification. Sites within 10 milliseconds of latency to AI clusters are already trading at 18%+ premiums.
• Check if your market is a frontier target. The growth is moving fast out of Northern Virginia, Dallas, and Phoenix into places like the Carolinas, Ohio, Georgia, Louisiana, and mid-tier markets with cheap power and available land. If your site sits in one of those zones, it might already be on someone's radar.

You don't need to become a data center expert. You need to know what your dirt offers to the people who are. And right now, the answer might surprise you.

Small steps compound. Clarity doesn't happen overnight... but momentum builds, one decision, one conversation, one strategic move at a time.

Here's to building your success, one step at a time...

from the dirt up.

Kris "Dirt Dawg" McGee 🐾

The Dirt Dawg Den