The dollar continued its recent decline, losing 0.8% and falling nearly 10% over the past three months. Speculators have been betting against the dollar and in favor of gold lately, hoping for a reversal of 2022’s performances

Many investors sold their Chinese high-yield dollar bonds last year, after residential-property giants China Evergrande Group, Kaisa Group, Sunac China and many of their peers defaulted on their international debt.

Inflation in the United States eased in December for the sixth consecutive month, after reaching a peak in mid-2022. This was due to the aggressive interest rate hikes by the Federal Reserve, as well as signs that the economy was cooling down.‍

Adding an extra layer of complexity, Mr. Powell has helped convince many investors that the labor market is the key to understanding the direction of inflation, making inflation data itself arguably less important.

Inflation and interest rates have risen sharply in recent months, putting pressure on asset managers and markets. The S&P 500 index fell 19% last year, and shares of BlackRock have slid 6.5% so far this year. The stock slumped 23% in 2022.