Before the recent dollar rally, powered by the nomination of hawkish Kevin Warsh to become the next Chairman of the Federal Reserve and the generalized speculation on his upcoming actions, the greenback had been on a slide since President Trump took office in January 2025, losing a tenth of its value.
Even with the current, burgeoning stock market, which has touched all-time highs, and the reduced yields on Treasuries, the magazine’s analysts concur that the dollar can still keep falling, as instability seems to be the trademark of the current administration.
They declared:
“When Mr. Trump backs off his maddest ideas, normality returns. But the spasms offer glimpses of a topsy-turvy world in which dollar assets are no longer safe.”
“Everyone should mourn how an asset that is an investor’s haven is increasingly tainted by risks the whole world must now bear,” the outlet concluded.
FAQ What recent assertion has The Economist made about the U.S. dollar? The Economist has labeled the dollar a dangerous asset, highlighting its vulnerability to various factors despite a seemingly strong snapshot of the U.S. economy. How has the dollar performed since President Trump took office? Since January 2025, the dollar has lost about 10% of its value, even amid a recent rally fueled by Kevin Warsh’s nomination to the Federal Reserve. What financial indicators contribute to the view of the dollar as overvalued? While the stock market has reached all-time highs, analysts note rising precious metals prices and stagnant growth in assets measured against currencies other than the dollar. What concerns are associated with the potential policies under Kevin Warsh? If Warsh adopts a dovish stance, inflation could rise, complicating the already unstable outlook for the dollar as it struggles to meet the Federal Open Market Committee’s 2% inflation target.
