Immediately after President-Elect Donald Trump won his second term last week, the US dollar surged, while US Treasuries fell: Election Sends Dollar Up, Treasuries Down in Early Trading Both moves are opposite sides of the same coin: Investors believe Trump’s policies will be inflationary. The theory suggests this would happen for a couple of reasons: The US government will spend more, and interest rates will rise higher than rates elsewhere in the world in response. That will attract foreign capital to America while making it less attractive for capital to leave the US. All of that extra capital in America will boost economic activity and demand for the dollar. … Read more