Key Takeaways
- • Luigi Buttiglione, former head of strategy at Brevan Howard Asset Management and founder of LB Macro SA, argues dollar bears may be misreading the market impact of President Donald Trump's setback in the US midterm elections.
- • Buttiglione contends a politically weaker Trump could ultimately push the Federal Reserve toward a more hawkish stance, which would strengthen the dollar.
- • LB Macro advises some of the world's best-known hedge funds, making its macro views relevant to currency and rates positioning across the alternative investment industry.
Summary
According to Bloomberg, Luigi Buttiglione, a former head of strategy at Brevan Howard Asset Management who left the firm in 2017, believes that dollar bears may be misinterpreting the implications of President Donald Trump's setback in the midterm elections. Buttiglione now advises some of the world's best-known hedge funds through his firm LB Macro SA.
His central argument is that a politically weaker Trump could ultimately lead to a more hawkish Federal Reserve, and that a more hawkish Fed would support a stronger US dollar. For institutional investors positioned for dollar weakness following the midterms, this view challenges the prevailing consensus that political gridlock or reduced presidential leverage would weigh on the currency.
The primary source is brief and does not provide specific figures on currency levels, rate expectations, or positioning data. Allocators monitoring FX and rates exposure should treat this as a macro thesis from a specialist adviser rather than a forecast with quantified targets.
His central argument is that a politically weaker Trump could ultimately lead to a more hawkish Federal Reserve, and that a more hawkish Fed would support a stronger US dollar. For institutional investors positioned for dollar weakness following the midterms, this view challenges the prevailing consensus that political gridlock or reduced presidential leverage would weigh on the currency.
The primary source is brief and does not provide specific figures on currency levels, rate expectations, or positioning data. Allocators monitoring FX and rates exposure should treat this as a macro thesis from a specialist adviser rather than a forecast with quantified targets.
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