Macro Insights Weekly - Trade war and USD

There is a near-term and medium-term scenario for the US dollar. We make cases for a near-term bull and medium-term bear.
Expectations of tariffs and tax cuts have fuelled a frenzy of US stocks and USD buying.
Markets have also begun scaling back rate cut expectations, pushing the dollar higher.
But for the medium term, views on inflation, fiscal, equity markets, and geopolitics are material.
Asset price crash and financial instability next year could be dollar negative.
If tariffs bring down US imports, exporters will have less USD to buy treasuries, a USD negative.