As Wall Street accepts that interest rate cuts are coming later than previously expected, the US Dollar Index has strengthened by 2.8% for the year as of Friday morning. The greenback slid last November and ended the year lower against a basket of currencies, but Fed Chair Jerome Powell said in January that cuts are unlikely to begin in March.
Recent economic data has supported the notion that the Federal Reserve will keep rates higher for longer. For instance, the economy added an eye-popping 353,000 jobs in January, underscoring resilience despite elevated rates. Additionally, the Consumer Price Index rose 3.4% annually in December, still above the central bank’s 2% target.
A stronger dollar is bad news for American companies but means US companies and consumers could spend less for imported goods and increases Americans’ purchasing power when traveling abroad. Meanwhile, let’s explore how Bismarck and North Dakota’s economy is performing local news delivered to your inbox! Subscribe to our Daily Headlines newsletter today!