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A Panoramic View of the US Economy and Dollar in 10 Charts

The pandemic inflicted a lot of damage on the US economy, but thankfully, the worst has passed. It turns out that when Congress and the Federal Reserve join forces to fight a crisis, the stimulus response is so overwhelming that it eclipses everything else. Take a look below for a bird’s-eye view of the US economy and the reserve currency in 10 charts.

Vaccination program running like a well-oiled machine

Businesses struggling to find workers again

Consumers have been loading up on savings amid lockdowns

Stimulus checks and pent-up demand to turbocharge consumption?

Supply chain disruptions, energy prices, and stimulus set to boost prices 

Dichotomy between Fed and investors about rate increases

Expectations for rate hikes have reawakened the dollar

FX is all about rate differentials between economies

Budget deficit has exploded thanks to stimulus packages

To ease the debt burden, Biden wants to raise corporate taxes

All told, there’s still a long way to go in this recovery, but America is healing its economic wounds quickly thanks to the overload of federal spending and the lightning-fast vaccination program. At this rate, it seems like the Fed will be forced to change tune on interest rate increases before long, like the Bank of Canada did lately.

This implies a rosy outlook for the dollar, in particular against the likes of the euro and yen, as both the European Central Bank and the Bank of Japan will likely be among the last major central banks to raise rates again. Therefore, the wind in interest rate differentials could continue to blow in America’s favor, lifting the dollar in the process.

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