Former Goldman Sachs Strategist: The Logic Behind the Dollar's Ten-Year Rise Faces Reversal, "Non-Farm" Good News Could Turn into Bad News

PANews reported on February 20 that former Goldman Sachs strategist Robin Brooks believes the ten-year trend of the U.S. dollar rising based on the unexpectedly strong U.S. monthly non-farm payroll data is coming to an end, signaling a “systemic shift” where traders will sell the dollar when U.S. employment data is strong. He stated that the market expects the Federal Reserve to cut interest rates, and if the Fed adopts policies that limit long-term nominal yields, strong non-farm data could reduce real yields, weaken the attractiveness of U.S. assets, and ultimately lead to a weaker dollar. Brooks said, “The market is skeptical about Trump’s policies because they have been unpredictable and inconsistent. The Fed has also been under attack.” He was referring to President Trump repeatedly calling for the central bank to cut rates. He added, “All measures are aimed at lowering interest rates, and I believe this is what the market’s subconscious is considering.” As evidence of this phenomenon, the unexpectedly strong January employment report released on February 11 almost failed to boost the dollar and instead had the opposite effect.