June 17, 2021, 12:02 pm EDT
Rising US Dollar
US dollar (ETF: UUP) jumped up +7% today after yesterday’s Fed meeting. The Fed chairman, Jerome Powell, acknowledged inflation arrived, though it might be transitory or short-term. The change of the tones shows the higher possibility of rising Fed fund rates from 0% before 2023.
All commodities, including energy (XLE -4%), basic material (XLB -3%), and precious metal (GDX -5%), were hit hard due to the strengthened US dollar.
Dow lost -300 points again or -0.8% but Nasdaq stayed in the positive area +0.7%.
The main question is how the US economy handles inflation in terms of housing markets and job markets. The speed of inflation and ability of the Fed’s power are key factors to determine the markets for the second half of 2021.