Deutsche Bank, Goldman See Fed Cuts Rekindling Dollar’s Slide

Forex

Summary:

Major banks including Deutsche Bank and Goldman Sachs expect the dollar to weaken in 2026 as Fed rate cuts continue, policy divergence widens, and capital shifts toward higher-yielding and faster-growing economies.

Deutsche Bank AG, Goldman Sachs Group Inc. and other Wall Street banks are forecasting that the US dollar will resume its slide next year as the Federal Reserve keeps nudging down interest rates.

The currency has stabilized over the past six months after tumbling by the most since the early 1970s during the first half of the year when President Donald Trump’s trade war unleashed havoc in global markets.

But strategists expect the greenback to weaken again in 2026 as the US central bank continues to ease monetary policy just as others hold steady or move closer toward raising rates. That rift would give investors an incentive to sell US debt and shift the cash to countries where payouts are higher.

As a result, forecasters at more than half a dozen major investment banks are largely predicting that the dollar will slip against major counterparts like the yen, euro and pound. According to the consensus estimates compiled by Bloomberg, a widely tracked index of the dollar will weaken some 3% by the end of 2026.

“There is ample room for markets to price in a deeper cutting cycle,” said David Adams, head of G-10 foreign-exchange strategy at Morgan Stanley, which expects the dollar to drop 5% in the first half of the year. “That leaves plenty of capacity for further dollar weakness.”

Deutsche Bank, Goldman See Fed Cuts Rekindling Dollar’s Slide_1

The dollar’s decline is expected to be more muted and not as broad as it was this year, when it lost ground against all of the major currencies, leaving the the Bloomberg Dollar Spot Index down nearly 8% in its deepest annual drop since 2017. And the outlook hinges on anticipation that the US job market will continue to weaken — which remains uncertain, given the surprising resilience of the post-pandemic economy.

Currency forecasting is also particularly vexing. When the dollar was surging late last year as investors piled into the so-called Trump trade, betting his policies would spur growth, strategists expected the the rally would reverse by mid-2025, only to get caught off guard by the scale of the drop during the first half of the year.

But strategists see the broad contours heading into the new year as a recipe for a weaker dollar. Traders are pricing in two more quarter-point Fed rate cuts next year, and it’s possible that whoever Trump picks to replace Chair Jerome Powell may give in to White House pressure to lower rates even more. Meanwhile, the European Central Bank is expected to hold rates steady while the Bank of Japan nudges them upward.

“We see risks stacked more against the dollar than in favor of the dollar,” Luis Oganes, London-based head of global macro research at JPMorgan, said at a news conference on Tuesday.

A weaker dollar would have ripple effects in the broader economy by pushing up the cost of imports, increasing the value of corporate profits from overseas, and boosting exports — which would likely be welcomed by a Trump administration that’s complained about the US trade deficit. It could also extend rallies in emerging markets as investors shift cash there to seize on higher interest rates.

That movement propelled emerging-market carry trades — which entail borrowing in low-rate countries and investing where yields are higher — to the biggest returns since 2009. JPMorgan and Bank of America Corp. both see potential for additional gains, flagging the Brazilian real and a handful Asian currencies — like the South Korean won and Chinese yuan — respectively.

At Goldman Sachs, analysts led by Kamakshya Trivedi this month also noted that the market is starting to price a more optimistic economic outlook into other G-10 currencies — like Canada’s and Australia’s — following stronger-than-expected data. They noted the dollar’s “tendency to depreciate when the rest of the world is doing well.”

Deutsche Bank, Goldman See Fed Cuts Rekindling Dollar’s Slide_2

The contrarians who expect the dollar to gain against some other major currencies point primarily to the robust US economy. That growth, powered by the artificial-intelligence boom, will lure investment flows into the country that drive up the value of the dollar, analysts at Citigroup Inc. and Standard Chartered said.

“We see strong potential for a dollar cycle recovery in 2026,” the Citigroup team led by Daniel Tobon wrote in their annual outlook.

The prospect of stronger-than-expected growth was underscored Wednesday, when Fed policymakers marked up their projections for 2026. Yet they still cut interest rates by a quarter point and continued to pencil in one more such move next year. Powell also allayed any concern that the Fed could pivot to raising rates, saying the debate now is whether to continue cutting — or wait — as it’s tugged between a weakening job market and still above-target inflation.

His comments were met with relief in the markets, where some traders had worried that the Fed would deliver a more hawkish message. As Treasury yields dropped, the Bloomberg dollar index slid 0.7% on Wednesday and Thursday, its biggest two-day drop since mid-September, when traders were positioning for the Fed to resume its rate-cutting cycle.

In an annual outlook note to clients late last month, Deutsche Bank’s George Saravelos, the global head of foreign exchange research in London, and Tim Baker, his New York colleague, said the dollar has benefited from a “remarkably resilient” economy and the run-up in US stock prices. Yet they said the dollar is overvalued and predicted it will fall against its major counterparts next year as growth — and equity returns — pick up elsewhere.

“If these forecasts materialize, they will confirm that this decade’s unusually long dollar bull cycle is over,” they wrote.

Source: Bloomberg

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Adam

Economic

Bitcoin hoarding giant Strategy (MSTR.O) may be at risk of being removed from the Nasdaq 100 index (.NDX) at its annual reshuffle on Friday, amid questions over its business model that have weighed on its share price, some analysts flagged this week.

After a sizzling rally that pushed its market capitalization to a peak of $128 billion earlier this year, Strategy - which started out as software company MicroStrategy but pivoted to bitcoin investing in 2020 - was included last December under the index's technology sub-category.

That decision was questioned by some market-watchers who argued that the pioneering business model, which has spawned dozens of copycats, more closely resembles an investment fund.

Strategy reported a net profit of $2.78 billion for the three months ended September 30, compared with a loss of $340.2 million a year earlier, mostly driven by an accounting change that allowed it to book gains on its bitcoin holdings. The Virginia-based company's revenue from the legacy software business, meanwhile, stood at just $128.7 million.

"If MSTR is deemed to be a holding company or a cryptocurrency company rather than its legacy business as a software company, then it is susceptible to removal," said Steve Sosnick, chief market analyst at Interactive Brokers.

The exchange operator, whose Nasdaq 100 index tracks the largest non-financial companies by market capitalization, declined to comment ahead of the announcement on Friday.

The Information reported , opens new tab in September that Nasdaq has been tightening requirements for digital asset treasury companies it lists. It has not generally commented on the inclusion of those firms in its indices.

Strategy did not respond to a request for comment.

Analysts flag risks for Strategy at Nasdaq 100 index reshuffle_1

A line chart showing Strategy and bitcoin's performance over the last two years

Index reshuffles are closely watched, since they dictate which companies benefit from billions of passive investor flows. Saylor, though, has generally dismissed worries over potential index exclusion, and some other analysts said they did not expect Nasdaq to delete Strategy on Friday.

DIGITAL ASSET TREASURY QUESTIONS

Concerns have grown over the sustainability of crypto treasury companies, whose shares have proved extremely sensitive to bitcoin's gyrations. Strategy shares are down 65% from their 2024 peak and 36% year-to-date, compared with a 3.6% drop in bitcoin this year.

Strategy's market value has fallen to $52.7 billion as of Thursday, while its bitcoin holdings are worth more than $61 billion, according to Reuters calculations.

While that isn't enough to exclude Strategy on market capitalization grounds, Mike O'Rourke, chief market strategist at JonesTrading, argued in a note this week that Strategy had been included on a technicality and that Friday was a "perfect opportunity for Nasdaq to correct last year's mistake."

If Nasdaq removes Strategy, the company could experience passive fund outflows of about $1.6 billion, according to estimates by Kaasha Saini, head of index strategy at Jefferies.

Global index provider MSCI (MSCI.N) has raised concerns about the presence of digital asset treasury companies in its benchmarks. MSCI is due to decide in January on whether to exclude Strategy and similar companies.

Saylor told Reuters this month that Strategy was engaging with MSCI, but that if it was excluded it wouldn't matter.

Some analysts believe that Strategy is safe because its market value is still relatively high. H.C. Wainwright analyst Mike Colonnese doubted Strategy would be removed, since it is "larger than about 30 other companies in the Nasdaq 100."

Beyond Strategy, Jefferies estimates drugmaker Biogen (BIIB.O) , IT solutions provider CDW (CDW.O) and four other stocks could depart from the Nasdaq 100. The six companies currently have the lowest market cap among the 100 members, according to data compiled by LSEG.

Jefferies expects that retail giant Walmart , which has a market capitalization of $932.7 billion, is not eligible to be included this time, because its effective first day of trading (December 8) on the Nasdaq was after the exchange's November 28 reference date for the rebalancing.

Nasdaq's announcement is expected after the market close on Friday, with changes effective December 22.

Source: reuters

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Justin

Central Bank

Federal Reserve officials — including two who will become voters in 2026 — offered strongly opposing views Friday on what to do with interest rates, continuing a debate that will grip the US central bank into the new year.

Three policymakers focused in their comments on inflation risks, though one of them suggested he was advocating only a temporary pause to rate cuts to confirm inflation is subsiding. A fourth emphasized risks to the labor market as the bigger concern.

The remarks were the first since Wednesday, when the Fed cut its benchmark rate by a quarter percentage point for a third consecutive meeting in response to rising unemployment. Dissenting votes against the decision indicated the string of cuts has become increasingly contentious amid lingering inflation, and projections showed the median official only expects one reduction in 2026.

Two officials — Chicago Fed President Austan Goolsbee and his Kansas City counterpart, Jeff Schmid — issued statements Friday outlining the rationale for their dissents against Wednesday's rate cut. It was Goolsbee's first dissenting vote since joining the Fed in 2023, while Schmid's followed a dissent against the previous rate reduction in October.

The Chicago Fed chief said in his statement he "felt the more prudent course would have been to wait for more information" before cutting rates again after a government shutdown delayed several key economic reports in October and November, given some "concerning" data on inflation prior to the shutdown.

Speaking later in the morning on CNBC, Goolsbee added that he projected more rate cuts in 2026 than most of his colleagues: "I'm one of the most optimistic folks about how rates can go down in the coming year," he said.

Schmid was less equivocal.

"Inflation remains too high, the economy shows continued momentum and the labor market — though cooling — remains largely in balance," he said in his statement. "I view the current stance of monetary policy as being only modestly, if at all, restrictive."

The Chicago and Kansas City Fed presidents will rotate off the Fed's voting panel in 2026. Two of their incoming replacements also spoke Friday — one emphasizing concerns about inflation and the other warning of risks to the labor market.

Cleveland Fed President Beth Hammack, at an event in Cincinnati, said the central bank should keep rates high enough to continue putting downward pressure on inflation.

"Right now, we've got policy that's right around neutral," she said. "I would prefer to be on a slightly more restrictive stance."

In projections published Wednesday alongside the rate decision, six of 19 policymakers indicated they would have left the benchmark rate where it was before this week's cut to close out 2025.

Since only 12 of the 19 vote on the rate-setting Federal Open Market Committee each year, and only two of the 12 with votes dissented in favor of higher rates, some analysts dubbed the plethora of elevated rate projections "silent dissents."

Philadelphia Fed President Anna Paulson, who with Hammack will rotate into the FOMC's voting ranks next year, was the only one of the four officials speaking Friday who emphasized ongoing risks to the labor market despite the central bank's recent efforts to adjust rates toward a more neutral setting.

"On net, I am still a little more concerned about labor market weakness than about upside risks to inflation," Paulson said Friday at an event hosted by the Delaware State Chamber of Commerce. "That's partly because I see a decent chance that inflation will come down as we go through next year."

Source: Bloomberg Europe

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Adam

Stocks

Economic

What a strange day. Overnight futures were sharply lower, with the Nasdaq down more than 1.5% at one point and clear signs of nervousness in global markets. Yet all of that anxiety disappeared almost immediately once the cash session opened. The S&P 500 erased an overnight decline of roughly 1% and finished the day higher by about 20 basis points.

S&P 500: When 0DTE Options Meet the AI Unwind Trade_1

Those cheap 6,900-strike call options may have been too tempting for the 0DTE crowd to ignore. Still, it remains a frustrating environment. It is becoming increasingly clear—at least to me—that the options market is exerting a growing influence on the S&P 500’s day-to-day price action. In many ways, it seems as though the index is being constrained and held in place, and it is difficult to know how much longer that dynamic can persist, perhaps through quad witching next week.

What stands out most is that the heaviest S&P 500 option activity was concentrated at the 6,900 strike for expiration on Thursday, and the index ultimately closed at 6,901. That coincidence strongly suggests that options-related flows drove a significant portion of the intraday price action.

Unfortunately, intraday transparency in the options market is limited. It is difficult to determine in real time whether traders are buying or selling calls, since changes in open interest are not available until the following day. With 0DTE options, that information is effectively unavailable altogether—at least with the data I can access. This makes it challenging to develop a precise mechanical understanding of what is occurring beneath the surface.

A trade printing at the ask does not necessarily imply a buyer, just as a trade at the bid does not automatically indicate a seller. Execution mechanics and hedging flows complicate the picture. As a result, interpreting intraday options activity with certainty is extremely difficult.

That said, Thursday followed a fairly classic pattern. The VIX traded overnight around 17, opened the cash session around 16, and then declined steadily to close near 15. A move like that typically reflects one of two dynamics: traders closing out put positions or traders selling calls.

S&P 500: When 0DTE Options Meet the AI Unwind Trade_2

What is perhaps most interesting is that the VIX decomposition shows call skew falling while put skew rose. That combination suggests that ATM put implied volatility fell faster than OTM put implied volatility within the VIX index, which is not what you would normally expect to see on a day.

Under more typical circumstances, volatility would be crushed across puts as hedges are closed. Instead, the action suggests that near-money puts were closed out—likely during the morning selloff—while OTM and longer-dated downside protection remained elevated.

S&P 500: When 0DTE Options Meet the AI Unwind Trade_3

It is almost as if the options market didn’t believe in the snap-back rally, and perhaps there is a viable and good reason for that.

How the market will respond to the second AI company failing to rally following its earnings results is a good question. Oracle (NYSE:ORCL) declined, and Broadcom (NASDAQ:AVGO) fell approximately 5% after its report tonight. Seems that selling AI “chips” doesn’t deliver a good gross margin in comparison to the other “chips” they sell.

At least that is what I thought I heard them say. The stock is likely to have a hard time rising today, given there are many calls to sell if the stock can’t get over $400.

S&P 500: When 0DTE Options Meet the AI Unwind Trade_4

Source:investing

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Gerik

Economic

Inflation Rises But Remains Low in Historical Terms

India’s consumer price index (CPI) inflation rose to 0.71% in November, up from 0.25% in October, according to official data released Friday. Though this marks a modest rebound, inflation still remains exceptionally low by India’s historical standards.

The increase aligns with Reuters’ median forecast of 0.70%, and was attributed to rising prices of vegetables, eggs, meat, fish, spices, and fuel. Notably, fuel and light prices rose 2.32%, up from 1.98% in October, reversing the cooling trend seen earlier.

Both urban and rural inflation posted increases, although Kerala and Tamil Nadu maintained the lowest state-level inflation rates.

Policy Outlook: RBI Focuses on Growth

The Reserve Bank of India (RBI) recently cut its policy rate by 25 basis points, citing the benign inflation outlook and slowing economic momentum. The central bank now forecasts FY2025–26 inflation at 2.0%, down from 2.6% in October, while predicting a gradual rise to 4.0% by Q3 2026.

RBI Governor Sanjay Malhotra emphasized that the central bank remains “growth supportive” and will continue meeting “productive requirements of the economy in a proactive manner.” Analysts are divided on whether the latest cut marks the end of the easing cycle, though many, including HSBC Research, argue that further cuts may be needed in 2026 as fiscal constraints and global weakness persist.

Trade Headwinds Weigh on Growth Prospects

India’s external sector faces increasing strain. In August, the U.S. imposed a 25% tariff on a range of Indian goods including textiles, gems, and marine products bringing total duties up to 50%, among the highest levied on a U.S. trading partner.

This hit labor-intensive exports hard. October data showed U.S.-bound exports declined 8.5% YoY to $6.3 billion, while overall exports fell 11.8% to $34.38 billion.

To stimulate demand amid these external shocks, the Indian government implemented GST cuts in September across consumer goods, vehicles, and farm products aiming to support consumption during the festive season.

While domestic demand improved slightly, the Indian rupee has continued to weaken, falling below the ₹90/USD threshold on Friday raising import costs and complicating monetary policymaking.

Growth Stimulus Faces Inflation Risk

Although India’s inflation remains low, the slight uptick in November signals waning deflationary momentum in food and energy. Combined with trade disruptions from U.S. tariffs and a sliding rupee, the RBI’s task of balancing growth support and inflation control may become more challenging in early 2026.

Unless exports recover or the rupee stabilizes, further rate cuts may be warranted but not without risk. The RBI’s current strategy hinges on gradual inflation normalization and domestic consumption strength both of which now face mounting external and currency pressures.

Source: CNBC

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Adam

Cryptocurrency

Oracle lost roughly $80 billion in market value on Dec. 11 when revenue missed expectations, and management hiked AI-related capex from $35 billion to about $50 billion, funded in part with rising debt.

The stock dropped up to 16%, dragging Nvidia, AMD, and the broader Nasdaq lower.

Reports framed the move as fanning “AI bubble” fears, with investors questioning whether the payoff from building massive data-center capacity is arriving fast enough to justify those costs.

On the same tape, Bitcoin slipped below $90,000, likely due to worries over the AI sector denting risk appetite.

The single-day episode encapsulates Bitcoin’s new structural vulnerability: it has become the high-beta tail of the AI trade, moving in lockstep with tech equity sentiment and bleeding harder when AI-linked stocks crack.

The correlation between Bitcoin and Nvidia reached approximately 0.96 over a rolling three-month window leading into Nvidia’s November earnings, according to analysis from 24/7 Wall St.

Regarding Nasdaq, The Block data shows that the 30-day aggregate Pearson Correlation coefficient was 0.53 as of Dec. 10.

Additionally, Bitcoin is down around 20% since the Fed began easing interest rates on Sept. 17, while the Nasdaq is up 6%. This suggests that when tech stocks crash, Bitcoin tanks harder.

The AI bubble narrative has matured rapidly over the past few weeks.

Reuters reported in late November that AI-linked valuations and macro gauges such as the Buffett Indicator have pushed overall US equity valuations beyond dot-com-era extremes, while AI-heavy indices show sharp pullbacks and rising volatility even as enthusiasm remains high.

Besides, big tech companies have raised hundreds of billions of dollars in bonds this year to finance data centers and hardware. Morgan Stanley estimated a funding gap of around $1.5 trillion for the AI infrastructure build-out, and Moody’s chief economist Mark Zandi warned that AI-related borrowing now exceeds tech’s run-up before the dot-com crash.

Essays in The Bulletin of the Atomic Scientists and The Atlantic both cite roughly $400 billion in AI spending this year against only about $60 billion in revenue.

The math implies that most firms are deeply loss-making and that the wider economy is now partly leaning on an AI investment boom that cannot last indefinitely.

The liquidity mechanism that makes an AI bust worse for Bitcoin

If the AI bubble bursts, the damage to Bitcoin will go beyond simple correlation, as AI capex increasingly becomes a credit story.

Estimates indicated that AI-related data center and infrastructure financing deals jumped from about $15 billion in 2024 to roughly $125 billion in 2025, driven by bond issuance, private credit, and asset-backed securities.

Analysts in a Reuters piece compare some of the structures and opacity to pre-2008 patterns and warn of “untested risks” if tenants or cash flows disappoint.

Central banks now treat this as a financial-stability problem. The Bank of England’s recent stability update explicitly highlights stretched valuations in AI-focused firms. It also warns that a sharp correction in AI-linked equities could threaten broader markets via leveraged players and private-credit exposures.

The ECB’s November 2025 Financial Stability Review makes a similar point: the AI investment boom is increasingly funded through bond markets and private capital, making it more exposed to swings in risk sentiment and credit spreads.

Oracle is the poster child. Its $50 billion capex plan for AI data centers, alongside a roughly 45% jump in long-term debt and record credit-default-swap spreads, represents exactly the sort of over-extended balance sheet regulators worry about.

If an AI bubble pops, those spreads widen, refinancing costs jump, and leveraged funds that were long AI-themed debt and equities are forced to cut gross exposure. Bitcoin sits at the end of that chain.

Chinese researchers’ analysis of Bitcoin versus global liquidity finds a strong positive relationship between Bitcoin prices and global M2 or broad liquidity indices. Their paper called BTC a “liquidity barometer” that performs well when global liquidity is high and poorly when it contracts.

The liquidity story is straightforward: if the AI bubble bursts and forces a credit squeeze, the first-order effect is a global de-risking and liquidity pullback.

Bitcoin is one of the first things macro and growth funds sell when margin calls come in, and its outsized sensitivity to liquidity makes the drawdown worse.

Act two: how the policy response could fuel Bitcoin’s next bull cycle

The other half of the story is what happens after the first wave of deleveraging.

The same institutions that worry about an AI-driven correction also implicitly point toward the likely response. If over-levered AI and credit markets wobble hard enough to threaten growth, central banks will re-ease financial conditions.

The IMF’s latest Global Financial Stability Report warns that AI-driven equity concentration and stretched risk asset valuations make a “disorderly correction” more likely and stresses the need for careful, but ultimately supportive, monetary policy to avoid amplifying shocks.

History gives a template. After the COVID shock in March 2020, aggressive quantitative easing and liquidity provision coincided with a massive rise in total crypto market cap from around $150 billion in early 2020 to roughly $3 trillion by late 2021.

A recent Seeking Alpha report mapped Bitcoin against global liquidity and the dollar index shows that, once easing starts in earnest and the dollar weakens, BTC tends to put in large upside moves over the following quarters.

The narrative rotation also matters. If AI equities go through a classic post-bubble hangover, with lower multiples, negative headlines, and political backlash over wasted capex, some portion of speculative and macro capital could rotate into a different “future of money” or “anti-system” bet.

Bitcoin is the cleanest non-corporate candidate.

Recent market stress has already seen capital concentrate back into BTC rather than alts. As liquidity thinned and volatility rose recently, Bitcoin’s dominance has climbed to around 57%, with ETFs serving as the institutional on-ramp.

Additionally, although Bitcoin has recently shown a correlation with tech stocks, decentralization and scarcity remain the core of the “hedge” narrative.

The trade-off Bitcoin can’t escape

Bitcoin’s structural problem is that it cannot decouple from the AI trade in the short term, but it depends on policy responses to an AI bust for its medium-term upside.

In the immediate aftermath of an AI credit crunch, Bitcoin bleeds because it is the high-beta tail of macro risk, and global liquidity contracts faster than most assets can adjust.

In the months that follow, if central banks respond with renewed easing and the dollar weakens, Bitcoin historically has captured outsized gains as liquidity flows back into risk assets and speculative narratives reset.

The question for allocators is whether Bitcoin can survive the first hit well enough to benefit from the second wave.

The answer depends on how violent the AI correction is, how quickly policy pivots, and whether institutional flows through ETFs and other vehicles hold or break under stress.

Oracle’s Dec. 11 earnings miss is a preview: Bitcoin dropped below $90,000 in the same tape that wiped $80 billion off Oracle’s market cap, showing that the correlation is live and the sensitivity is real.

If the AI bubble fully unwinds, Bitcoin takes the punch first. Whether it emerges stronger depends on what central banks do next.

However, one short term positive indicator revealed itself later in yesterday’s trading session. Nvidia recovered 1.5% from its intraday low, while Bitcoin followed suit but gained over 3%, reclaiming $92,000.

Source: cryptoslate

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Devin

Political

U.S. financier Jeffrey Epstein appears in a photograph taken for the New York State Division of Criminal Justice Services' sex offender registry March 28, 2017 and obtained by Reuters July 10, 2019. New York State Division of Criminal Justice Services/Handout via REUTERS.

WASHINGTON, Dec 12 (Reuters) - Democrats on a congressional oversight panel released more than a dozen new images from the estate of the late convicted sex offender Jeffrey Epstein on Friday, including photos of now-President Donald Trump.

Trump is featured in three of the 19 photos shared by House Oversight Committee Democrats, who said they are reviewing more than 95,000 images produced by the estate.

In one black-and-white photo, Trump is seen smiling with several women — whose faces are redacted — on each side of him. A second image shows Trump standing beside Epstein, and a third, less-clear image shows him seated alongside another woman, whose face is also redacted, with his red tie loosened. It was not clear when or where the photos were taken.

Former President Bill Clinton, former Trump aide Steve Bannon, Bill Gates and former Treasury Secretary Larry Summers also appear in the batch of images, as well as sex toys, a $4.50 "Trump condom" emblazoned with Trump's face and the all-caps phrase "I'M HUUUGE!"

"These disturbing photos raise even more questions about Epstein and his relationships with some of the most powerful men in the world," Representative Robert Garcia of California, the top Democrat on the oversight committee, said in a statement. "We will not rest until the American people get the truth. The Department of Justice must release all the files, NOW."

The congressional Democrats said they redacted the women's faces to protect the identities of Epstein's victims.

The White House did not immediately respond to a request for comment.

Trump and Epstein were friends during the 1990s and early 2000s, but Trump says he broke off ties before Epstein pleaded guilty to prostitution charges.

Trump has consistently denied knowing about the late financier's abuse and sex trafficking of underage girls.