A growing dollar crisis is unfolding, threatening the world economy. The US dollar has fallen by over 9% against a basket of major currencies since its peak in mid-January. This decline, coupled with rising yields on ten-year Treasuries, signals to investors that America’s economic stability is at risk.
Rumors are spreading that big foreign asset managers are dumping their greenbacks, indicating that they perceive the US as becoming increasingly risky. As a result, investors are selling American assets, even though returns remain positive. This trend raises concerns about the potential consequences for global markets and economies.
The current market conditions highlight the need for careful attention to economic indicators and policy decisions. As investors reassess their risk tolerance, policymakers must take proactive measures to address potential vulnerabilities and maintain confidence in the US economy.
Source: https://www.economist.com/leaders/2025/04/16/how-a-dollar-crisis-would-unfold