What US dollar weakness says about American exceptionalism

I mean, of course it's natural for most assets to go up and down. Um, but I I don't know if we have yet seen this kind of a move in the dollar that implies what this perhaps implies about American exceptionalism. I'm curious your take on whether American exceptionalism has indeed really taken a hit or are there other aspects going on here?

Thanks for having me, Julie. Look, I you know, it's interesting because the dollar, uh, the dollar strength, the US dollar strength was not really something that prevailed only in the back half of 2024. Uh, the dollar has been a strong currency for the past 13 years. It's been generally increasing or rallying or appreciating against other currencies both in nominal terms and real terms since 2001. So if you're going to talk about American exceptionalism as being somewhat equivalent to, uh, the appreciation of the US dollar, the strength of the US dollar, effectively we've had American exceptionalism for 13 years. And and if you point to the headlines of course in the history of these last 13 years, it it certainly does seem to support the idea that American exceptionalism has been around that long. We've had a lot of economic, small economic revolutions in this country that have, uh, produced productivity, uh, uh, produced growth, um, and it's been superlative effectively, uh, at least the way the market has interpreted relative to what has been going on in other countries over this 13-year period. So American exceptionalism has been going on for 13 years. Now the question is, are we at a point where after 13 years of this, uh, we are going to start to go in reverse. I think to some extent we are. One reason is that these periods of American exceptionalism that are matched by dollar strength don't usually last more than about a decade. So we're kind of overdue for a return. Uh, the other issue of course is that we've gone in these 13 years to a point in which US asset values and the value of the dollar has gotten very rich, objectively speaking, if you just look at these long-term charts. That's another reason. And of course with the a change of the administration and with the policy uncertainty that has come with it in the last, uh, few weeks and months, there now is a, you know, a compelling reason for asset allocators abroad to start, uh, winding down or dialing back their dollar exposure, both their US asset exposure and the attached dollar exposure. And I think those three things, you know, working together are what's going to, uh, cause the dollar at least to go into, I wouldn't call it a tail spin, but certainly a period of weakness here. So I don't think that we are going to get back to these highs that you alluded to earlier that prevailed in the very beginning of this year, uh, before this this down move. I think that's a thing of the past and I think that is the dollar is going to be weighed down by a few factors going forward, and it could last a few years.