- Feb 26, 2023

Has the USD peaked?

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29 Comments

Feb 27, 2023

This is purely anecdotal but services inflation is quite real. In high end areas, there are serious price increases. The cost of a taxi in NY to the airports is materially higher than what it was two years ago. It is staggering -- I also see no reduction in food prices. In fact meat prices (at least in Upper East Side NYC) are trending higher.

As for the war benefiting the US, it is quite interesting that such a benefit (re shoring, selling high priced LNG to Europe, Europe companies moving production to the US) is at the expense of our allies. It is really a different approach than the US in the Cold War. Several books on the Marshall…

CTC

Mar 03, 2023

Replying to

The prevailing narrative is that the US has the best higher educational system in the world, which will outpace countries like Russia and China in terms of technological advancement. That is absolutely true from 1950 to 2010. But is it possible that the cult of DEI will weaken that? Are professors more focused on writing Cultural Revolution like confessions than making scientific progress?

This is a very interesting question because there is no stats or objective sources to compare this. All sides have an ideological axe to grind. Research journals are political creatures. You look at the Chinese efforts in semiconductors so far and it has been mediocre. But then you look at Cisco, which in 1999, was the leader…

James Wang

Feb 26, 2023

Dear David,

two short questions:

(1) Do you really see Fed to hike 50bps on March? Becasuse it is a very brave call. Can 2 months economic data change Fed's pace and once they do 50 bps, what should they consider on May (25 or 50)? In addition, if they go 50 bps, it counters Powell statement on Fed/1 that they see disinflaiton is ongoing,right?

(2) Do you see possible or short term peace talk between Russia and Ukriaine? They reason I say this is because I see Ukraine is almost out of their top military force. They send their top to the front line but not stay in Kiva. The only reason should be they are out of enoug…

David

Feb 27, 2023

Replying to

Hi James, I see at least a 50% chance of a 50bp hike in March, versus the market at 20%. If the February labor market data confirms an acceleration in q1, then the prob goes up to 75%.

Regarding Ukraine, Zelensky knows he needs to win the coming spring counteroffensive to stop Europe from selling him down the toilet. It does not mean he will win but he has no choice but to keep going. This is why I still think the war will get worse

sam omar

Feb 26, 2023

FXY vs YCS. Defend the bonds vs the currency?

David

Feb 27, 2023

Replying to

The BOJ cares much more about bond yields than the yen

Has the USD peaked?

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