The top court’s vote on Thursday to allow President Donald Trump to remove the leaders of two independent federal agencies has repercussions for financial markets, according a note from Jefferies.

While justices gave the Federal Reserve some protection, the Supreme Court’s stance in favor of more executive power could make the U.S. less attractive, analysts said.

“The Court’s order suggests they’ll likely support expanded presidential power in upcoming decisions, giving credence & support to the Unitary Executive Theory,” the note said. “We believe expanded Presidential power is bearish for risk assets & will further erode the concept of American exceptionalism in markets.”

The Unitary Executive Theory argues that the president has sole authority within the executive branch. That means that not only does the White House have the ability to fire agency heads, it can also impound money allocated by Congress. 

The issue reached the Supreme Court after Gwynne Wilcox, who was ousted from the National Labor Relations Board in January, and Cathy Harris, who was booted from the Merit Systems Protection Board in February, sued the Trump administration.

Both agencies are considered independent, meaning members serve until their terms are up and can only be removed for issues such as misconduct or breach of duty.

While the D.C. Circuit Court of Appeals ruled to reinstate Wilcox and Harris, the Supreme Court’s vote on Thursday blocked the move, granting a stay that will allow Trump’s firings to stand while the case works its way through lower courts again. For now, Trump can fire officials without cause, breaking with 90 years of historical precedent.

“We believe that the most important, structural changes in how the US Government functions will be decided by the US Supreme Court on questions related to executive power and executive authority,” the Jefferies analysts said.

In addition to the removal of leaders of independent agencies, interpreting presidential powers more broadly also has implications for imposing tariffs, firing federal workers, and deregulating the economy outside traditional mechanisms, the note pointed out.

“We believe that Thursday’s Supreme Court order portends expanded executive power, in line with the Unitary Executive Theory, which will lead to investors putting a higher risk premium on US assets going forward, due to increased policy variability,” Jefferies warned.

Not long ago, the U.S. economy and financial markets looked unstoppable, but Wall Street has dimmed its view on so-called American exceptionalism since Trump began pressing his tariff agenda.

The “Liberation Day” shock accelerated that bearish sentiment, and mounting worries about deficits have given foreign investors even more reasons to turn away from U.S. markets.

Mohamed El-Erian, chief economic advisor at Allianz, said U.S. exceptionalism has been “put on pause,” though it’s too early to say if the damage is irreversible.

For George Saravelos, head of FX research at Deutsche Bank, the dollar’s decline after a 20-year Treasury bond auction drew tepid demand this past week was a red flag.

“To us this is a clear signal of a foreign buyer’s strike on US assets and the associated US fiscal risks we have been warning for some time,” he wrote in a note. “At the core of the problem is that foreign investors are simply no longer willing to finance US twin deficits at current level of prices.”