The Fed is going to raise rates because they don't want to be blamed for a stock market bubble. But, higher rates are causing capital to flow into U.S. stocks out of fear of a global recession. That's the Catch-22 most people are missing.
That's what the market is setting up for and right now the euro is climbing as traders wrongly think the EU is more stable than the U.S.. But who's debt is more expensive? Who's debt is of higher quality? The dollar has been weakening despite higher rates because the market thinks the Fed is raising into a recession. It isn't wrong. The Yield Curve has flattened, but it won't invert like Greg Mannarino has been predicting.
We have the standard Kabuki Theatre leading up to a debt ceiling fight. Nothing new here. Weakened Trump now equals weakened dollar, which is the wrong read. Without a breakout to the upside in Gold this dollar bearishness is simply a big head fake based on political risk.