The US Dollar declined on Friday, reversing gains amid concerns regarding fiscal stability after the House's narrow passage of Trump's tax bill. This has created anxiety about the national debt, especially following Moody's downgrade of the US credit rating to Aa1. In addition, yields on long-term Treasury securities surged, signaling weakened demand for US assets. As uncertainty looms over tariff negotiations and fiscal matters, attention turns to Fed Chair Jerome Powell's forthcoming speech, which may shed light on the Fed's approach to inflation and fiscal pressures.
The US Dollar fell despite strong PMI and jobless claims figures, highlighting market fears of fiscal instability due to President Trump's tax bill and Moody's downgrade.
Investors are particularly concerned about the potential long-term fiscal implications of the tax bill and the recent downgrade of the US credit rating by Moody's.
Yields on long-term Treasury securities reached multi-month highs, reflecting the impact of concerns over the US fiscal situation on demand for US assets.
All eyes are on Fed Chair Jerome Powell's upcoming speech, which could clarify central bank responses to inflation risks amid growing fiscal pressures.
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