The US Dollar remains firm near its 200-day moving average, while US equity futures are steady ahead of Nvidia’s quarterly earnings report—widely seen as a key gauge of the ongoing AI boom, according to BBH analysts.
USD Steady as Markets Watch for AI Sector Signals
Treasury Secretary Scott Bessent said President Donald Trump is expected to announce his choice for the next Federal Reserve Chair before Christmas. The shortlist includes Kevin Hassett, Kevin Warsh, current Fed Governors Christopher Waller and Michelle Bowman, and BlackRock executive Rick Rieder—all known for favoring looser monetary policy.
When asked about his selection, President Trump hinted at the possibility of choosing someone from within the Fed, saying, “We may go the standard way… It’s nice to, every once in a while, go politically correct.” This comment boosts the odds for Waller or Bowman—continuing the pattern of recent chairs such as Powell, Yellen, and Bernanke, who were elevated from the Board of Governors.
Foreign Demand for US Long-Term Assets Remains Strong
The latest TIC data shows continued robust foreign private-sector demand for US long-term securities, especially equities. Net foreign purchases rose to $208.5 billion in September, up from $181.2 billion in August, driven by near-record buying of US stocks.
However, on a 12-month cumulative basis, foreign holdings of US long-term securities dipped to $1.511 trillion from a record $1.549 trillion in August. BBH expects foreign appetite to gradually fade as the Trump administration’s push to narrow the US trade deficit reduces the flow of dollars overseas—limiting the funds available to be recycled back into US assets. This, they say, creates a structural headwind for the USD.
