Rogoff Calls Dollar 20% Overvalued, Warns Markets ‘Naive’ on War

Harvard economist Kenneth Rogoff declared the U.S. dollar is overvalued by 20%, signaling potential long-term correction risks for global markets and trade imbalances. Rogoff warned financial markets are "naive" in assuming a swift resolution to the ongoing Iran conflict, suggesting prolonged geopolitical instability could disrupt economic forecasts and currency valuations. The April 2026 assessment highlights investor overconfidence in near-term diplomatic solutions, which Rogoff argues underestimates the conflict’s protracted nature and broader economic spillover effects. Currency analysts note the dollar’s sustained strength—driven by safe-haven demand—may face downward pressure if Rogoff’s correction predictions materialize, impacting commodity prices and emerging-market debt. The warnings align with broader concerns about fiscal sustainability and monetary policy misalignment, as prolonged dollar dominance risks exacerbating global inflation and trade tensions.