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.
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