Why the Dollar Is Rising Despite Rate Cuts

The US dollar is strengthening even as the Federal Reserve cuts interest rates — the opposite of what basic economics would predict. In this episode, Lucas and Luna unpack the paradox, looking at how the dollar index hit 120.1 while the Fed has been easing. They examine the role of global capital flows, the yen at 160, and why the yuan has barely budged. The episode focuses on one specific mechanism: the carry trade. When the rest of the world offers even lower yields, US rates — even after cuts — remain attractive. Lucas argues this is a geopolitical problem in disguise: a strong dollar hurts US exports and makes it harder for emerging markets to service dollar-denominated debt. Luna pushes back on whether the Fed can do anything about it. The conversation drills into one concrete number — the dollar index at 120.1 — and explores what it means for trade, central banks, and the global economy in June 2026. #DollarStrength #FederalReserve #InterestRates #CarryTrade #Yen #Yuan #TradeWeightedDollarIndex #GlobalCapitalFlows #GeopoliticsAndMarkets #FexingoBusiness #Economics #BusinessPodcast #LucasAndLuna #USD #EmergingMarkets #ExportCompetitiveness #CurrencyParadox #June2026 Keep every episode free: buymeacoffee.com/fexingo