Trump’s policies weaken the dollar and blindside investors
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Traders were wrong. Completely wrong. Six months into 2025, Trump’s presidency has bulldozed nearly every assumption Wall Street made about markets, inflation, and the strength of the US economy. What was supposed to be a year of American dominance, driven by Trump’s low-tax and high-tariff policies, turned into something else entirely. According to Bloomberg, those policies triggered fear, confusion, and some of the wildest price action seen in years. The fallout started fast. Massive moves in sovereign bonds kicked things off. Then the Japanese yen climbed nearly 9% against the dollar. Emerging markets began attracting attention again. But the real shock came from where traders least expected: the US dollar, stocks, and Trump’s own economic agenda. All of it got shredded, and the market’s golden trades are nowhere to be found. Trump’s policies weaken the dollar and blindside investors At the beginning of the year, the bet was simple: Trump’s economic plans would drive inflation higher, slow down any chance of Federal Reserve rate cuts, and push the dollar even higher. That’s not what happened. A Bloomberg index tracking the US currency posted its worst start to a year since 2005. The selloff was deep. The shock was global. Things escalated in April when Trump rolled out his “Liberation Day” tariffs — wide-reaching, aggressive penalties that rattled investor confidence. The impact was brutal. Worries over a possible US recession took hold, and traders started to believe Trump might be actively trying to weaken the dollar to help domestic industry. That’s a problem for the American government. It still depends on foreign investors to finance its massive debt pile. A weaker dollar means smaller returns for those investors. It also means less faith in US assets. JPMorgan strategist Meera Chandan said the dollar’s fading connection to interest rates and equities might…
Filed under: News - @ June 30, 2025 12:27 am