US Dollar Bulls Have Little to Fear Amid Escalating Conflict
The US dollar bulls have little to fear according to Dmitri Demidenko's forecast as of September 9, 2026. Despite a rally in the EUR/USD against the backdrop of an escalating conflict in the Middle East and rising oil prices, bears appear to be driven by falling Treasury yields and the ECB's hawkish rhetoric.
The anticipation of death is worse than death itself, which may explain the rally in the EUR/USD. Bears fear the Treasury's announcements about the scale of Treasury bond buybacks and the ECB's hawkish signals. Scott Bessent's Treasury Department shocked markets on August 19 by announcing it would raise the minimum purchase size for long-term Treasuries to $4 billion per transaction.
A $4 billion purchase would likely be viewed as disappointing, potentially allowing Treasury yields to continue rising in the near term. A $5-6 billion figure appears to be the most likely outcome, while a significantly larger purchase could trigger a mixed market reaction.