KBRA Releases Research – Assessing the Ripple Effect: Tariff Uncertainty Clouds Structured Finance Outlook

KBRA releases a research report exploring how recent tariff escalations may impact various structured finance sectors.

While the full impact of the recent spike in tariffs has yet to materialize, early estimates from Evercore ISI indicate that the U.S. effective tariff rate has reached its highest level in more than a century. These elevated trade barriers could create significant economic headwinds, thereby increasing the risk of recession while also driving inflation, which may limit the Federal Reserve’s flexibility in managing monetary policy and amplifying risks for structured finance.

Given how quickly conditions are evolving—at times shifting by the hour—it remains too early to provide a decisive view. However, persistent volatility will negatively impact credit fundamentals across most securitized asset classes and stifle the robust issuance volume we anticipated in our 2025 Outlooks. While it is not yet possible to quantify these effects, this KBRA report outlines key areas of potential credit deterioration across sectors, pending greater policy clarity.

Click here to view the report.

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