USD: Limited inflation implications from Trump comments – UBS
By FXStreet Insights Team
Date Published: 28 Jan 2026 | Date Modified: 28 Jan 2026
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Paul Donovan from UBS, notes that a unanimous 92 out of 92 surveyed economists expect no change in US interest rates today. He discusses the potential need for an insurance rate cut to maintain consumer spending and the implications of President Trump's comments on the US Dollar.
Paul Donovan from UBS, notes that a unanimous 92 out of 92 surveyed economists expect no change in US interest rates today. He discusses the potential need for an insurance rate cut to maintain consumer spending and the implications of President Trump's comments on the US Dollar. Donovan highlights that bonds are more vulnerable to dollar weakness than inflation.
Fed Day insights on US Dollar
"An insurance rate cut may be necessary, to keep fear of unemployment low and allow US consumers to continue cutting savings rates to pay for tariffs. An insurance cut is not urgent, however."
"If the Fed took Trump’s social media posts seriously, there would be some uncertainty about inflation from future potential tariffs. It seems unlikely the Fed will focus on this, however."
"Trump’s comments suggesting support for the US dollar’s slide have limited inflation implications. Companies price to market—few chief executives change pricing strategy just because a foreign exchange dealer presses a button."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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