David J. Shourabi Porcel

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Cake day: October 7th, 2024

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  • To the contrary: the value of the US dollar, as measured against other currencies, has surged in the past weeks amidst Donald Trump’s announcements of tariffs, because markets expect them to bump prices and higher prices, in turn, would could prompt the Federal Reserve to raise interest rates, just as we saw in 2022.

    TL;DR: higher tariffs => higher prices => Federal Reaerve raises interest rates => US dollar appreciates

    The incoming Trump administration could counter this dynamic by changing the mandate under which the Federal Reserve has been operating for about a century and bringing it under the executive, stripping it of its independence.