How the Dollar is Sparking a Hidden Global Crisis
Source: YouTube · Eurodollar University · published Dec 28, 2024 · 23:20
The US dollar surged in 2024 despite the Federal Reserve cutting rates, contradicting the expectation of a dollar decline and undermining the "Goldilocks" soft landing narrative. This shift was driven not by Fed policy alone, but by global economic weakness, rising risk aversion, and central banks accelerating rate cuts due to unexpected disinflation and deteriorating conditions.
Key Takeaways:
• The dollar strengthened significantly in 2024, reaching 108 (vs. 101 in 2023), despite Fed rate cuts, as economic weakness spread globally 0:30.
• Central banks globally—ECB, Swiss National Bank, Bank of Canada, and Bank of England—cut rates more aggressively than expected, shifting from "higher for longer" to rapid easing due to disinflation and weak growth 1:08-1:59.
• The labor market in the US weakened substantially, with private job growth declining from 160K to 108K and unemployment rising to 4.2% (adjusted to 4.8%) by November 2024 19:00-19:59.
• Global currencies declined sharply: CNY weakened to 7.30, Yen to 158, and Euro to 104, reflecting broader economic instability 15:14-15:59.
• Commodities like oil, gasoline, and the Baltic Dry Index collapsed due to lack of demand, contradicting expectations of recovery 17:01-18:30.
The dollar’s rise reflects a global economic downturn, not Fed policy, and 2024 failed to deliver a soft landing, leaving more uncertainty for 2025.
Sources:
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this year did not turn out the way it was supposed to reflation Goldilocks it was supposed to be the year of the Dollar's downfall but rather than fall down the Dollar's demise has been greatly exaggerated even though J Powell and the Federal Reserve ended up cutting rates anyway that was what everyone said the FED wasn't cutting the Fed was aggressively hiking it was going to maintain rates higher for longer that's why the dollar was going up but now that the FED is cut the Dollar's going up even more but with that there's a whole range of issues a resurgent Greenback doesn't happen on its own and it sure isn't about the Federal Reserve one way or the other when we look back in review this year starting with the dollar in mind it all starts to make a lot of sense what happened in 2024 fil…