U.S. Dollar, Treasuries Poised for Rebound as Fed Keeps Rates Unchanged

On April 15, Kaiyuan Macro Economist Jonas Goltermann released a report stating that the U.S. dollar and U.S. Treasury bonds, which have recently experienced a sharp decline due to President Trump's tariff retaliation, are poised for a rebound in the coming months. Goltermann noted that the tariffs have led to a loss of confidence in the U.S. as a safe haven for its currency and bonds. However, he believes that the U.S. economy may avoid a full-blown recession, and the Federal Reserve will keep interest rates unchanged this year, restoring the interest rate differential in favor of the dollar. This, in turn, is expected to ease the bond market's turmoil.

Goltermann's analysis suggests that the recent sell-off in the U.S. dollar and U.S. Treasuries was a reaction to the tariff measures implemented by the Trump administration. The tariffs have caused investors to reassess the stability of the U.S. economy, leading to a decline in confidence in the dollar and Treasury bonds. However, Goltermann believes that the U.S. economy is resilient enough to withstand the impact of the tariffs and avoid a recession. This resilience, combined with the Federal Reserve's decision to keep interest rates unchanged, is expected to restore the interest rate differential in favor of the dollar, making it a more attractive investment option.

According to the analyst's forecast, the bond market's turmoil is expected to ease as investors regain confidence in the U.S. economy and the dollar. This rebound in the U.S. dollar and U.S. Treasuries is expected to be driven by a combination of factors, including the Federal Reserve's monetary policy, the resilience of the U.S. economy, and the restoration of the interest rate differential in favor of the dollar. Goltermann's analysis provides a cautious but optimistic outlook for the U.S. dollar and U.S. Treasuries in the coming months, suggesting that investors may want to consider these assets as part of their portfolios.