Inflation Remains A Headache Ing

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Inflation Remains A Headache Ing

Inflation Remains A Headache For Us Dollar - Ing

According to an ING analyst, the inflation levels remain a key factor for the US Dollar. Any reduction in inflation will be taken as dollar-negative, while a resurgence will be dollar-positive.

These days, the type of macro data that raises optimism is that the m/m core inflation print is slowing down. However, looking at the near future reveals that Trump remains a key wildcard for inflation!

Inflation To Jump Higher

The inflationary policies of Trump are enough to push the inflation index outside of the acceptable range. So, while the US Dollar is strong due to the short-term inflation situation, it is still dodging the reality that's ahead of it.

Just a few days ago, the Treasury Secretary was in the Senate for a hearing. Even that was a non-event as the markets couldn't get anything big out of it. He talked about cutting the government spending, a key hallmark of the Trump policy.

However, he was not as hawkish as the President Donald Trump. So, it remains to be whether the Trump policies promised before elections were just to get the votes or it will turn into a reality.

If we look back at the first term of Trump, many members of the cabinets have to temper or skim down the strong statements of the President.

This time, the Treasury Secretary will likely work on balancing the fiscal policies of Trump. It is highly likely that he will also consider the debt constraints when shaping or implementing policies.

Up ahead, key data releases from the USA are due but that's not the big issue at hand... What will drive the US Dollar in the coming quarters is the inflation and the economic conditions.

The general perception is that the Trump era will lead to higher inflation and a stronger Dollar. Now, it remains to be seen whether that will truly be the case!

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