With a US Federal Reserve rate hike largely expected to be the result at Wednesday’s FOMC meeting – a 94.4% probability, according to CMEGroup’s FedWatch tool — the watchword to determine future rate hikes might be “inflation.” But there is another performance driver that could be driving inflation to watch, and that is the US dollar. A continued drop in the dollar could increase inflation rather rapidly, particularly in the commodity sector. This, in turn, could force the Fed’s hand at raising rates quicker – a move the stock market might not like. From December 2016, when the US dollar…
Dollar Slide Could Be Just Enough To Hit 2% Inflation Target
Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.