DXY remains range-bound near 96-100 as US yields rise, reflecting investor concerns over fiscal policy and stagflation risks under Trump 2.0.
The US Dollar Index (DXY) has failed to break out of its 96-100 range despite the US Treasury 10Y yield climbing 7.9 bps to 4.67%. This divergence follows structural concerns over fiscal deficits, supply-side inflation, and exhausted consumer buffers under Trump’s economic policies.
Economists in a Reuters poll now overwhelmingly expect the Fed to hold rates steady at 3.50-3.75% for the rest of the year, reversing earlier expectations of a rate cut. Meanwhile, the S&P 500 fell 0.7% to 7353.61, extending a three-session decline amid worries over elevated energy prices.
The decoupling of the DXY from yields reflects deeper market skepticism about the sustainability of current economic trends, particularly under renewed stagflation risks tied to geopolitical tensions.