Kit Juckes on Fed, ECB, and Dollar Outlook (with Jonathan Ferro, Lisa Abramowitz, Amarie Hordern)

Kit Juckes argues the Fed will eventually need to hike rates as the US economy outgrows the rest of the world, but the bar is high for now. He sees ECB rate hikes as a mistake in a weak growth environment, making the dollar more attractive than the euro. De-dollarization is marginal.

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Kit Juckes 8.5

Kit Juckes on Fed, ECB, and Dollar Outlook (with Jonathan Ferro, Lisa Abramowitz, Amarie Hordern)

dxy

I want to own it [the dollar].

6 calls

+3

no reliable edge (random outcomes)

3/23/2026 12:16:34 PM	short term up	6 days later	+1.09%	+1.09%
1/27/2026 7:14:21 PM	long term up	61 days later	+4.21%	+4.21%
12/15/2025 2:06:05 PM	medium term up	20 days later	+0.12%	+0.12%
10/15/2025 12:41:41 AM	medium term cautious down	20 days later	+1.84%	-0.92%
8/19/2025 4:21:10 PM	short term cautious down	5 days later	+0.21%	-0.11%
7/30/2025 2:36:25 PM	medium term cautious up	20 days later	-1.81%	-0.90%

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yields

Juckes expects the Fed to eventually hike rates, which would push yields higher. He says the Fed will argue for tighter policy.

Jonathan Ferro

US manufacturing expanded at fastest pace in four years; investors await more data on rate path. Kit Juckes writes hikes are off the table for now.
Kit Juckes

The bar for a Fed rate hike is very high now but will not feel so high in 6-12 months. The US economy is growing strongly.
Lisa Abramowitz

What is the barrier to multiple rate hikes given inflationary pressures from big tech capital spending and other sources?
Kit Juckes

Leaving it too long and hiking too fast too late is a recipe for recession. The danger is with slowing economies raising rates, like the ECB planning several hikes, which seems a quicker way to a problem.
Lisa Abramowitz

If ECB rate hikes are a mistake in a weak growth environment and the Fed sits on its hands, do you want to own or sell the dollar?
Kit Juckes

I want to own the dollar. ECB rate hikes are going up despite not enough growth, tightening into weak growth makes things worse. The Fed doesn't recognize the problem yet but will, and will argue for tighter policy.
Amarie Hordern

An ECB report says gold replaces US Treasuries as the world's top reserve asset. Are you worried about de-dollarization?
Kit Juckes

De-dollarization is marginal. The dollar has been the world's reserve currency to a much greater degree and for longer than the pound. There is not enough gold to replace a fraction of US Treasuries.
Amarie Hordern

What does the ECB have in common with Arsenal Football Club?
Kit Juckes

They are too defensive. The ECB cannot win with premature tightening and a defensive strategy, unlike the Fed which is more like Paris Saint-Germain.

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