Dollar Could Weaken Even As Fed Embarks on Rate Hiking Cycle

The rationale for predictions of continuing strength in the dollar are well-known but may be wrong, writes Ben Levisohn for Barron’s. Fundstrat strategist Thomas Lee looked at the last 11 tightening cycles (when the Fed began raising rates) and found that five involved “divergence” from European central banks (meaning that they were easing), which lasted a median of 17 months. During such times, according to Lee, the dollar has typically weakened a median 6.6% during… Read More

Buffett: Dollar Will Decline

Reiterating his belief that the U.S.’s stimulus policies will lead to inflation, Warren Buffett says investors should steer clear of long-term American fixed-income investments, because the dollar will not hold its purchasing power over the next decade or two. “I would recommend against buying long-term fixed-dollar investments,” Buffett said at a news conference during his recent trip to India, Bloomberg reports. “If you ask me if the U.S. dollar is going to hold its purchasing… Read More