GM89: When Credibility Becomes the Risk Premium ft. Maurice Obstfeld
Top Traders Unplugged
Will AI Rescue Fiscal Challenges?
Alan asks about AI’s potential to boost growth; Maurice is cautiously optimistic but warns against relying on AI to solve fiscal woes.
Maurice Obstfeld joins Alan Dunne for a clear-eyed look at how the foundations of the global monetary system are shifting - and why much of the world is quietly preparing for a future without a stable dollar anchor. Drawing on decades in policy and research, Obstfeld explains how tariffs, fiscal dominance, and political interference are eroding the norms that once held the system together. They discuss the risk of fragmentation, the creeping politicization of the Fed, and why trust - not theory - is the real currency at stake. This is a conversation about power, credibility, and what happens when both start to slip.
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Episode TimeStamps:
02:18 - Introduction to Maurice Obstfeld
05:26 - The role and evolution of the International Monetary Fund (IMF)
08:14 - What has been the rationale for tariffs, and how has it impacted the economy?
11:13 - Has the viewpoint on tariffs shifted?
18:42 - How the changing monetary policy could undermine the dollar
27:19 - Does an alternative to the dollar even exist?
29:50 - What are the implications of moving away from the dollar?
34:20 - A possible financial repression incoming?
36:25 - The impact of an unusual approach to policy making domestically
39:16 - A fork in the road for the Fed
47:19 - From problem to crisis
51:32 - Is Obstfeld optimistic about AI?
53:06 - The end of the neoliberal era - what comes next?
58:00 - Advice for other investors
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