The president-elect wrote that the coalition of non-Western countries “should expect to say goodbye to selling into the wonderful U.S. Economy” if it backs a currency other than the U.S. dollar.
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.
Tariffs will further devalue the dollar.
It’s been great for crypto and not much has even happened yet.
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,
wouldcould 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.
Reality TL;DR: Fed is not actually raising interest rates any time soon.