As shown by the latest CFTC report, U.S. dollar futures indicate a further deterioration in its outlook. During the reporting week, the net short position on the USD increased by $3.9 billion, reaching $14 billion. Positioning against the euro remained almost unchanged, while in other currencies, the trend in favor of abandoning the dollar continues to develop.

There are several reasons behind the declining interest in the dollar. The most obvious one is the threat of a trade war, which will affect most countries worldwide. In this context, the U.S. president's unpredictability and shocking methods of addressing accumulated issues do not help to increase confidence.

The second reason is the threat of a recession in the United States. The yields on short-term bonds are catching up with those on long-term bonds; three-month Treasuries have already equaled the yield of 10-year ones. This process has historically ended with a recession within a 3-to-12-month delay. Although U.S. officials assure market participants that the threat of a recession is exaggerated and the U.S. economy is stronger than ever, the facts suggest otherwise. The Atlanta Fed's GDPNow model projects a 2.4% GDP decline in the first quarter — a very serious figure.

The third reason, which could be the main one, is the uncertainty surrounding the Federal Reserve's future actions. Initially, Trump's new economic policy was assessed as inflationary, and several studies, particularly from the New York Fed, indicate rising inflation expectations. The University of Michigan's data even points to a strong increase.

At the same time, the yield on 5-year TIPS (Treasury Inflation-Protected Securities) has not been rising since February but has been declining. This signals an opposite evaluation — consumers expect inflation to rise, market analysts predict inflation growth, yet businesses see it falling.

This is a critical point — the Fed cannot afford a situation where market participants begin doubting its ability to maintain price stability. However, to respond appropriately, it is necessary to understand in which direction prices will move — upward or downward. Various studies provide contradictory results, which only contribute to uncertainty and doubt. Amid this complicated situation, Trump has found reasons to question the Fed's independence, which cannot be seen as a sign of stability.

The next FOMC meeting will take place on May 6–7. New data may clarify things, with particular attention focused on two reports—the first GDP estimate for Q1, due on April 30, and the employment report on May 2. In any case, it should be assumed that skepticism about the U.S. dollar is growing, and there are no signs of increased demand for it.

As for the stock market, it is worth noting that our expectation of continued panic sell-offs did not materialize. It is still too early to talk about a return to a growth trajectory. The S&P 500's return to the 5500 level is a result of Trump's assurances that many countries are "ready to make a deal," meaning the process of bringing production facilities back to U.S. soil could develop, inevitably leading to an inflow of investments.

At the same time, resolving trade issues according to Trump's scenario is far from certain. Moreover, the expiration of the 90 days could coincide with the onset of a recession, as the first data for the second quarter will begin to emerge. It is not hard to imagine that the foreign sector will reduce its dependence on the U.S. amid stagflationary prospects created by Trump's policies, which would lead to capital outflows and dollar sales. Accordingly, the scenario of a further stock market decline remains the primary one for now.