Goldman Sachs(US:GS) Mei Ri Jing Ji Xin Wen·2025-04-28 08:00Core Viewpoint - The US dollar index has declined nearly 9% since Trump's return to the White House, potentially marking the worst performance in the first 100 days of a presidency since 1973, with Goldman Sachs warning of a long-term structural depreciation of the dollar [1][2][3]. Group 1: Economic Indicators - Goldman Sachs reports that while current "hard data" in the US remains strong, the negative impacts of tariff policies on the economy may not become apparent until mid-May or early June [1][3]. - The dollar index was reported at 99.68 points, having briefly fallen below 98, marking a three-year low [2]. Group 2: Investor Sentiment - Non-US investors currently hold $22 trillion in US assets, with half of that in unhedged stocks, indicating that a reduction in US exposure could lead to significant dollar depreciation [2][9]. - Shah emphasizes that the dollar's weakness is likely to be structural, as it serves as a natural adjustment mechanism to tariffs and economic uncertainties [3][5]. Group 3: Long-term Trends - Shah notes that the influx of private capital into US assets, which has historically supported a strong dollar, may be reversing, leading to a potential decline in demand for US assets [5][15]. - The dollar's actual value is currently above its historical average, suggesting a potential depreciation of 25% to 30% if non-US investors reduce their exposure [9]. Group 4: Policy Uncertainty - High levels of policy uncertainty and low consumer and business confidence contribute to market risk aversion, with Goldman Sachs estimating a 45% probability of a US recession in the next 12 months [16][19]. - Despite recent tariff pauses, many tariffs remain in place, and significant reductions are unlikely, which could prolong economic challenges [16][19].