#FedRateCutAffectsDollarTrend A decreased purchasing power of the US dollar occurs when the dollar's value declines, allowing consumers to buy fewer goods and services with the same amount of money. This can happen due to inflation, a weak economy, or a decline in the dollar's value relative to other currencies. As a result, imports become more expensive, and the cost of living increases, reducing the purchasing power of the dollar and impacting consumers' ability to afford goods and services.