President Donald Trump recently learned of an economy that hasn’t witnessed growth in more than 50 years.
The Financial Times said Monday that Trump’s trade and economic policies are causing the U.S. dollar to go toward its worst first half of the year since 1973.
The outlet claims that thus far this year, the dollar index has fallen by over 10%. The precipitous drop starts to compare it to the worst start since the Bretton Woods system’s demise, which occurred toward the end of World War II. Additionally, it is among the lowest percentages for a six-month period that have been reported since 2009.
The dollar index evaluates the strength of the US dollar in relation to six other currencies, such as the yen, euro, and pound.
In an interview with the Financial Times, Francesco Pesole, an FX strategist at the multinational bank ING, attributed the decline to Trump’s inconsistent tariff implementation, the US borrowing needs, and concerns about the independence of the Federal Reserve, given that Trump has repeatedly threatened the central bank’s chair, Jerome Powell.
According to Pesole, the dollar has turned into a whipping boy for Trump 2.0’s unpredictable ideas.
According to the journal, the U.S. dollar dropped 0.4% on Monday as the Senate started its frantic vote on changes to Trump’s massive, gorgeous plan. According to a fresh assessment by the Congressional Budget Office, the legislative package, which passed the Senate on Saturday night by a vote of 51-49, may increase the national debt by $3.3 trillion over the next ten years.
Both Republicans and Democrats in Washington are worried about the plan because of its anticipated cost, which has sparked the president’s feud with tech billionaire Elon Musk.
In the meantime, the euro’s value has risen by 13%, or more than $1.17. Trump’s Liberation Day tariffs, which were announced in April and set a 10% tariff baseline for almost all countries, have caused shock, according to Andrew Balls, chief investment officer for global fixed income at bond group Pimco.
Balls stated that although the dollar’s position as the global reserve currency has not altered, a substantial depreciation is still possible.
The Financial Times added that prior expectations that the Fed would lower interest rates—a demand that has been at the heart of Trump’s criticism of its head in recent weeks—may have contributed to the slide. Citing forecasts of increased inflation and slower economic growth in the upcoming months, the central bank decided to maintain rates at their current level earlier this month.
His mental state is mediocre. During last week’s NATO summit, Trump called Powell “low IQ for what he does.” In fact, I think he’s a really dumb person.
Trump stated that he is evaluating three or four candidates to take over the position. Powell was nominated by the president during his first term, and his term ends in 2026.
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