Cathie Wood has said the dollar’s sharp appreciation is being led by continued aggressiveness Federal Reserve policy could lead to a situation similar to that place and Louvre Agreements signed in the 1980s.

What happened: The Plaza Accord was a 1985 agreement between the G-5 Nations manipulating exchange rates to devalue the dollar against the Japanese yen and the German Deutschmark. In 1987, the Louvre Accords were signed to stabilize international foreign exchange markets following the continued devaluation of the dollar following the signing of the Plaza Accords.

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“The UK LDI crisis was the first rupture in the global financial fabric caused by the Fed’s unprecedented 13-fold interest rate hike. This is the BOE was forced to divest from the Fed and has resumed buying gilts instead of selling them,” Wood tweeted.

She also gave examples of how the Bank of Japan and the Chinese central bank are supporting their currencies.

In response to the dollar’s sharp rise, the BOJ and PBOC are supporting their currencies – selling dollars and buying yen and yuan – while the Swiss National Bank has drawn on the Fed’s dollar swap facility for two weeks, which it did in 2008/2008. 09 never did.

— Cathie Wood (@CathieDWood) October 17, 2022

“Similar to what happened in the mid-1980s, other central banks are announcing or calling for increases in dollar liquidity. In 1985, their calls for Fed and Treasury action culminated in the Plaza and Louvre Accords. We wouldn’t be surprised if further crises force something similar,” Wood said.

After the Fed’s aggressive rate hikes this year, investments ranging from equities to bonds have taken a hit. That SPDR S&P 500 ETF Trust SPY has lost over 25% since the beginning of 2022, while the Vanguard Total Bond Market Index Fund ETF BND has lost over 16% over the same period.

On the yield curve: Wood went on to highlight her take on inflation, citing the inverted yield curve and comparing them…