Goldman Sachs: Trump's Policies Likely to Strengthen U.S. Dollar by 2025

Economic analysts at Goldman Sachs forecast that the policy measures introduced by newly elected U.S. President Donald Trump, including steep tariff hikes and significant tax cuts, will bolster the U.S. dollar index through 2025. While these initiatives may initially generate market volatility, they are expected to provide sustained upward momentum for the dollar over the long term.

Goldman Sachs experts emphasized that the proposed tariff increases could surpass previous levels by a significant margin and would likely be implemented swiftly. These measures reflect Trump’s reliance on tariffs as a central political tool, targeting key trading partners such as China, Mexico, and Canada. This approach is anticipated to intensify trade tensions and introduce new challenges to global economic policies.

Simultaneously, the tax cuts planned by the Trump administration are projected to stimulate short-term economic growth in the U.S., further supporting the dollar's value. Analysts also speculate that these initial measures could expand to include additional taxes and more rigorous regulatory actions, amplifying their effects on financial markets and economic activity.

Despite expectations of limited initial reactions to the tariffs, Goldman Sachs predicts that their full implementation will yield lasting effects. As markets become increasingly responsive to the economic shifts brought about by these policies, the dollar is likely to strengthen against other currencies.

In summary, Goldman Sachs economists suggest that the combination of tariff hikes and tax reductions may represent a transformative shift in U.S. economic policy. While these changes could pose risks to global economic stability and market equilibrium, they are poised to solidify the dollar’s position as a dominant global currency.

Read also:

UBS: Is now the time to buy the U.S. dollar amid strong increases?

Bitcoin or the Dollar: Which asset will Trump favor?