Global Macro DWMA –
Economic Growth & Inflation
April 20, 2021
Arrow Insights favors global assets, moderate risk asset allocations, and managed futures. Our investment rationale is no longer heavily weighted towards an expectation for a weak U.S. dollar (USD). Our outlook equally weights the risks of a weak or strong dollar. Extreme USD and economic volatility are likely to breed high market volatility, which favors macro-economic investment strategies.
Treasury yield repression policies enforced by the U.S. Federal Reserve (Fed) and 25% to 32% year-over-year (YOY) money supply growth are probable causes for a weak USD. Yet, the USD remains strong against emerging market nation currencies. Since March 2020, U.S. markets have bested emerging nation stocks and their currencies have declined against the USD, even as commodities soared. This is odd: Commodity-currencies tend to rise with commodities. These trends and factors cited below favor a strong dollar.