The ongoing government shutdown and escalating trade tensions with China are heightening concerns that US growth could slow more than the Fed can tolerate. While these are likely temporary headwinds for the dollar, the key question is: what happens to the greenback once the shutdown ends and trade tensions subside?

The Fed is set to further ease monetary policy due to concerns about the weakening labour market and political pressure. The assumption is that the current interest rate is having a dampening effect on the economy. But is that really the case, and what are the consequences if, in hindsight, the Fed lowers interest rates too much?

Investors in precious metals and equities are increasingly assuming that central banks will prioritize economic growth over fighting inflation. However, once this path has been taken, it will be difficult to reverse course. This is very positive for gold and equities, but has the enthusiasm gone too far now?