According to Bloomerg. No doubt the USD is losing in value in nominal terms against a basket of currencies as well gold, since the weekend.
Source: TradingEconomics.com, accessed 1/27/2026.
This correlation suggests a diminished confidence in the value of US dollar assets. Is this due to heighted inflationary concerns, or default related concerns? 5 year CDS values have risen in the past weeks.
(Click on image to enlarge)
Source: Worldgovernmentbonds.com accessed 1/27/2026.
At the same time, the ten year break-even has registered lower:
(Click on image to enlarge)
Source: Treasury via FRED, accessed 1/27/2026.
Breakevens are imperfect measures of inflation expectations, but for a quick and dirty measure, I count a risk premium associated with political uncertainty as a bigger contributor than higher expected inflation.
Oh, and consumer confidence (Conference Board) fell to a 11 year low.
More By This Author:
Chinn-Ito Financial Openness Index Updated To 2023Uncertainty Drivers: Tariffs On Canada Or Government Shutdown?
What Is Q3 Economic Output? Where Are We Going in Q4? And Other Known Unknowns
Comments
Log in or sign up to join the conversation.