Founders: The Dollar Must Weaken Now
Buy the Rumor, Sell the News
We have noted here recently that since Donald Trump has taken office, the dollar has actually weakened. There is clearly a buy -the-rumor and sell-the-news mindset going on.
The dollar along with stocks rose precipitously between Donald Trump's election and his inauguration. Since then stocks have remained buoyant but gold has continued to rally with a declining dollar.
One would argue that tariffs are bullish for the US dollar strength. And that would be a good argument. But now, we're seeing a weaker dollar despite everything that's unfolding.
Stepping away from the bigger picture and focusing on the macroeconomic: the dollar has strengthened because of tariff concerns for sure. But at some point the dollar will begin to weaken substantively because as tariffs do their work and weaken the global economy a weaker dollar will be necessary to counterbalance that, essentially tariffs slow the global economy and the Fed will have to ease rates eventually
Example today, the day tariffs are supposed to go into effect, the dollar is actually weaker thus far. Meanwhile gold is up $30.