The Dollar Drops As Inflation Rises: Here’s What That Means For Your Wallet

The Dollar Drops As Inflation Rises: Here’s What That Means For Your Wallet


As inflation in the United States reaches record highs, investors are losing confidence in the dollar.

On Wednesday, the Bureau of Labor Statistics reported that in December consumer prices rose by 7% over the previous year — the highest rate in roughly 40 years. Likewise, “real average hourly earnings” — which consider the effect of inflation — decreased by 2.4% from December 2020 to December 2021, starkly cutting the purchasing power of American consumers.

Following the news, the ICE U.S. Dollar Index (DXY) — a measure of the currency against other global reserve assets — hit a two-month low, signaling a weakened dollar. 

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What does this phenomenon imply for Americans enduring a rough-and-tumble post-COVID economy? As energy analyst and Fox Business contributor Phil Flynn explained:

The most direct correlation

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