The Investment Implications of a Falling Dollar

Dr. David Kelly, Chief Strategist at J.P. Morgan Asset Management, delivers a market and economic outlook for the latter half of 2025 in this monologue podcast. He reviews the first half's positive market performance, particularly the strong returns from non-U.S. equities, and then analyzes the impact of U.S. economic policy shifts, including the OBVVA act and changes in immigration policy, on future growth, inflation, and interest rates. He forecasts a slower U.S. growth rate, higher inflation, and rising federal debt, potentially leading to a further decline in the U.S. dollar. He contrasts this with the economic situations in the Eurozone, UK, China, Japan, Canada, and Mexico, suggesting varying degrees of vulnerability to U.S. trade policies. Finally, he advises investors to consider increasing their exposure to non-U.S. assets due to the potential for a longer-term dollar decline, the higher valuations of U.S. equities compared to international counterparts, and the current underweighting of international assets by American investors.