Dollar confidence shaken: Jobs, politics and deficits test its core
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Since the tariff drama erupted earlier this year, the Federal Reserve has walked a fine line. Through spring and early summer, Chair Jerome Powell struck a cautious stance—first holding rates steady to gauge the fallout, then stressing patience as inflation cooled but trade policy uncertainty clouded the outlook. The Fed’s message was clear: it would not overreact, instead waiting for the data to show whether tariffs were a passing headwind or a deeper drag. But at Jackson Hole this year, Powell’s tone shifted. A slowing economy, weakening job creation, and fragile consumer spending prompted him to hint strongly that rate cuts could arrive as soon as September. For the dollar—once propped up by higher interest rates and Fed confidence—this shift could signal the start of a longer period of weakness. Here’s why the greenback could soon face serious pressure. 1. Powell’s Pivot: A Cautious Step Toward Cuts Live Events Powell acknowledged tha...