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Why the pivot may be closer than you think

Richard Nixon's Treasury Secretary John Connally famously said in 1971, "The dollar is our currency, but it is your problem". Nixon's actions at the time closed the gold window, imposed a number of tariffs, and drove the USD down in the aftermath of the collapse of the Bretton Woods Agreement of fixed exchange rates.
Fast forward to 2022, and the situation is different. The Federal Reserve is one of the most hawkish of advanced economy central banks, and its interest rate policy. The Fed's actions are exporting disinflation abroad and forcing major trading partners to engage in a series of competitive tightening to defend their own currencies. 

While US financial conditions are still relatively stable, financial cracks are appearing abroad and USD strength has become a wrecking ball wreaking havoc around the world. In spite of the hot September CPI print, the Fed's pivot may be closer than the market expects.
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