The US dollar has fallen by over 4% against major currencies since April 1st, while ten-year Treasury bond yields have risen by 0.3 percentage points. This combination is reminiscent of Japan’s “triple yasu” loss in the 1990s, where a decline in stock markets, rise in bond yields, and depreciation of the currency occurred simultaneously. The US is now facing this same toxic mix, which could spell disaster for its finances.
President Donald Trump’s tariff pause provided some relief, but the situation has worsened since then. As investors realize that the pause was not as effective as initially thought, fears are growing about the potential consequences of a financial crisis. The decline in the dollar and rise in bond yields have triggered concerns about America’s ability to sustain its high levels of debt and deficit.
A prolonged period of economic instability could lead to shoddy roads, outdated infrastructure, and decreased competitiveness. As China continues to strike back against US trade policies, the world is witnessing an almighty trade clash between the two largest economies. The situation highlights the need for a more sustainable approach to managing America’s finances and mitigating the risks associated with the dollar’s decline.
Source: https://www.economist.com/finance-and-economics/2025/04/13/a-flight-from-the-dollar-could-wreck-americas-finances