And while Englander does not see a direct line from such intellectual consensus to a weaker USD, he would not rule out that weaker USD somehow ends up as the long-term outcome.
Below we recap some of the key points from Englander's take on the "modest proposal" to reduce the USD's role in reserves.
As the FX strategist notes, a strange convergence of views emerged between President Trump and Jackson Hole (JH) participants. The president feels that lower US rates and a weaker USD would be good for the US. Participants at Jackson Hole suggested that a weaker USD and lower US interest rates would be good for the world. The similarity can be extended in that the president sees higher US rates as having choked off growth in the US economy, while the JH crowd sees higher US rates and a stronger USD as having choked off growth abroad through the risk-premium channel.