Trump’s First Month in Office: Super Dollar Eases, Egg Price Surge Spurs Inflation Concerns

Dollar Weakens Amid Global Inflation, Eggflation Hits Consumers / Reuters

In the month following President Donald Trump’s inauguration, the U.S. dollar has seen a significant decline. The Dollar Index, which measures the value of the dollar against six major currencies, stood at 106.71 on February 14, marking its lowest point in over two months. This drop reflects a 2.4% decrease compared to the figure on Trump’s inauguration day, January 20, which was 109.35. The shift in the dollar’s strength comes amid a growing focus on inflation concerns rather than exchange rate fluctuations.

Trump’s policies on tariffs were expected to fuel a “super dollar” scenario, but this pressure has eased significantly. Early in his presidency, many analysts predicted that Trump would take aggressive actions on trade, but his moves have been more moderate than anticipated. For instance, he delayed the implementation of a 25% tariff on imports from Canada and Mexico by a month, and the tariffs on Chinese goods were set at 10%—far lower than the promised 60%. Trump’s approach has suggested a more flexible stance on trade, with negotiations taking precedence over blanket tariffs. This has calmed markets, as investors now view the risk of a global trade war as less likely.

Despite the easing of the dollar’s strength, inflationary pressures are becoming more pronounced. In the U.S., the outbreak of avian influenza (AI) has led to a dramatic increase in egg prices, resulting in what has been dubbed “eggflation.” The price of a dozen Grade A eggs surged by 53% over the past year, reaching $4.95 in January 2025. This increase has surpassed the previous record set in January 2023, signaling a broader inflation trend in the food sector. As eggs are a key ingredient in many food products, including baked goods, this price hike is expected to contribute to higher overall food costs.

This inflationary spike is compounded by rising prices in other food commodities, such as coffee and energy products. As consumer expectations for inflation continue to climb, the impact is already being felt in everyday purchases. U.S. consumers’ expectations for one-year inflation jumped by 1 percentage point to 4.3% in January, which can largely be attributed to the rising costs of food and energy.

The course of inflation and the U.S. dollar’s future movements will be closely tied to Trump’s trade policies. If the president intensifies his tariff measures, the dollar could appreciate further, driving up the cost of imported goods and putting additional pressure on inflation. Therefore, the trajectory of U.S. foreign trade policies will remain a key factor in the stability of both the dollar and inflation in the coming months.

The unfolding dynamics of global trade, coupled with domestic inflation concerns like eggflation, will likely define the economic landscape in the early stages of Trump’s presidency. Markets are watching closely to see whether his policies will continue to support dollar weakness or push inflationary pressures to new heights.