Economics
A Dollar Rising Into a Possible U.S. Recession Could Be a Bad Omen
- Some fret strength could make it harder for economy to rebound
- The greenback also climbed during prelude to 2001 contraction
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The dollar has been ascendant in 2019 and forecasts for a U.S. recession are growing louder. If the greenback’s strength keeps up and the economy does shrink, some experts are worried this combination will make it harder for the economy to claw back out.
A Federal Reserve Bank of New York indicator shows more than 30% odds of a downturn in the next 12 months. Exports and investments are critical parts of U.S. gross domestic product, so a dollar that climbs as rates fall -- and traders expect the Fed to keep reducing them -- would leave just consumers and fiscal policy to power growth.