Paul Tudor Jones Predicts 10% Dollar Decline Amid Rate Cuts, Fed Shift

Ticker BuzzWednesday, Jun 11, 2025 9:13 pm ET
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Paul Tudor Jones, a prominent investor and the founder of Tudor Investment Corp, a 16 billion macro hedge fund, has forecasted that the U.S. dollar will depreciate by 10% over the next year. This prediction is grounded in the expected significant reduction in short-term interest rates, which Jones believes will result in a steeper yield curve and a consequent decline in the dollar's value.

Jones, who is 70 years old, also speculated that as Jerome Powell's term as the Federal Reserve Chairman concludes next year, President Donald Trump may appoint a "super-dovish" successor to align with his growth agenda. This potential change in leadership at the Federal Reserve could further influence the dollar's trajectory, as a more accommodative monetary policy is likely to weaken the currency.

The ongoing trade tensions initiated by the Trump administration have already caused market volatility, with the Bloomberg Dollar Spot Index experiencing a near 8% decline so far this year. This is the worst start to a year for the index since its inception in 2005. Options traders are bracing for further weakness in the dollar, despite a recent rebound from pandemic lows. Overall, investors anticipate that the dollar will continue to depreciate against a basket of major currencies in the coming month.

Jones' prediction aligns with the broader market sentiment, as many investors and analysts are preparing for a potential shift in the Federal Reserve's policy stance. The appointment of a "super-dovish" chairman could signal a more aggressive approach to monetary easing, which would likely put downward pressure on the dollar. This, combined with the anticipated reduction in short-term interest rates, could create a challenging environment for the U.S. currency in the near future.