Billionaire Paul Tudor Jones: "Dollar Could Fall 10% Within a Year"

Bloomberg TV Interview
High Likelihood of an Ultra-Dovish Appointment as Next Fed Chair
Portfolio Should Consist of Stocks, Gold, and Bitcoin

Pual Tudor Jones, a prominent figure in the hedge fund industry, has predicted that the value of the US dollar could fall by as much as 10% within the next year. He also said that after Jerome Powell's term as Chair of the US Federal Reserve (Fed) ends, President Donald Trump is highly likely to appoint a successor with an "ultra-dovish" (pro-monetary easing) stance.

In an interview with Bloomberg TV on June 11 (local time), Jones said, "Short-term interest rates will drop sharply next year, and as a result, the dollar will be significantly weaker," adding, "The value of the dollar will fall substantially." He is the founder of Tudor Investment Corp., a macro hedge fund with $16 billion in assets under management.

He explained that if the Fed cuts its benchmark interest rate, the yield curve will steepen, which will reduce the investment appeal of the dollar and inevitably lead to a decline in its value.

So far this year, the Bloomberg Dollar Index has fallen by about 8%, marking the largest annual drop since the index was established in 2005. This is interpreted as a result of increased policy uncertainty following the launch of the Trump administration and the ensuing trade wars.

There is also a clear trend in the options market of investors preparing for the possibility that the dollar's weakness will continue. Although dollar investment sentiment, which had dropped to its lowest level since the pandemic, has partially recovered, many investors still expect the dollar to fall against a basket of major currencies over the next month.

Jones also warned that President Trump's tax cuts could become a risk factor for the stock and bond markets in the long term. He pointed out, "Ultimately, there will come a time when the market reacts to the government's excessive fiscal expansion by calling it 'nonsense.'"

Jones said that when Chair Powell's term ends next year, President Trump is likely to nominate an ultra-dovish figure as the next Fed chair to support his economic growth policies. He named Treasury Secretary Scott Bessent as a strong candidate.

He stated, "If I were President Trump, the first thing I would do is appoint an ultra-dovish central banker to induce rate cuts," adding that after that, he would push for an austerity package that includes tax increases for high-income earners and overall spending cuts in areas such as social security and defense.

Jones warned that continued expansion of fiscal deficits could ultimately lead to a decline in the stock market, and advised that until then, a portfolio consisting of stocks, gold, and Bitcoin would be appropriate as a hedge against inflation.