If all the factors (large fiscal deficit, AI investment boom, clean household balance sheets) were truly pushing up the trade deficit, the dollar should be stronger; since markets are not pricing that, the trade deficit cannot widen unless the dollar rises — the saving-investment imbalance reconciles with a depreciated dollar through inflation and timing rather than being a genuine conundrum.

causalpending

Speaker

Joseph Gagnon

Evidence Quote

unless the dollar goes up, I don't think the trade deficit can widen.

Source

The changing dollar regime: An updatePeterson Institute for International Economics
Created: 6/18/2026, 1:57:48 PM

My Notes

Loading notes...