Kenneth Rogoff

The Iran war and ongoing tariffs are stagflationary shocks that will push interest rates up over the medium term, as military spending, populism, and high debt levels drive inflation expectations higher and make inflation sticky.

Rogoff explicitly mentions the Japanese yen and Korean won are at "ridiculously low" values relative to the dollar and likely to revert to mean. Currencies significantly undervalued based on purchasing power parity tend to appreciate over time through reversion. Expect appreciation of these currencies against the dollar, making LONG positions favorable. Continued dollar strength or regional economic issues could delay reversion.

Rogoff states the US dollar is very high and likely to depreciate, especially against Asian currencies, with a guess of 5% down in 2026. The dollar is out of line with purchasing power parity, and historical patterns show reversion to mean tends to occur slowly. Expect dollar depreciation, making SHORT positions on the dollar potentially profitable. Rapid resolution of the Iran war or strengthening US policies could sustain dollar strength.