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Raoul Pal’s Statement
Macroeconomic analyst Raoul Pal, a former executive at Goldman Sachs, says that if the dollar continues to rise, it might damage the outlook for many assets, including oil and stocks in emerging markets. “If the dollar keeps going, it’s going to really break things. It has literally done parabolic…,” Raoul Pal stated pointing at a pronounced dollar index graphic.
The dollar will seriously destabilize everything if it continues to rise. It literally performed a parabolic. The break from the trend, according to Pal, the CEO and co-founder of Real Vision Group, hinted that the dollar index would also reach levels of 120. The dollar index is a metric that evaluates the value of the dollar in relation to a group of different currencies.
Bond Market: Most Overvalued Business
Pal also emphasized how the ongoing dollar rise may affect riskier investments. He doesn’t believe that stocks will see new lows, but he’s not sure. similar to cryptography, he believes the dismal economic data from this week has rescued them. Following remarks made by the U.S. Federal Reserve Chair Jerome Powell suggesting that higher rates would last for some time, emerging market stocks saw a steep fall on Monday.
The publication of this week’s unemployment claims will be closely watched by traders and investors. The Fed may take the health of the labor market into account before determining the timing of its next rate rise. Investors may assume that the Fed would scale back its hawkishness over upcoming rate rises if economic data is poor.
In Pal’s opinion, the bond market is currently the most overvalued relative to the economic cycle. Pal wrote that if the bond market flips, everything turns eventually.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
