The Intelligence from The Economist The buck stops here? The threats to dollar primacy
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Apr 15, 2025 
Henry Kerr, the Economics editor at The Economist, dives into the precarious status of the U.S. dollar as the world’s dominant currency. He discusses the rising bond yields and the growing mistrust among investors that could lead to a shift in reserve currencies. Additionally, Kerr highlights France's young far-right leader, Jordan Bardella, and the challenges in Hong Kong’s taxi industry amid efforts to revitalize tourism. These insights reveal a complex landscape of economic and political dynamics shaping global finance.
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Dollar's Reserve Currency Status Under Threat
- A sell-off in US bonds and the dollar suggests a potential threat to the dollar's reserve currency status.
- This combined sell-off, alongside Congress's fiscal loosening, raises concerns about financial disruption.
Concerns about Strong Dollar
- Some senior figures in the Trump administration are not keen on the dollar's reserve currency status.
- They view the strong dollar as a tax on manufacturing workers, making US exports more expensive.
Potential Consequences of Dollar Decline
- If the dollar's decline continues, rising bond yields will increase US debt interest costs.
- This could necessitate spending cuts or tax increases, posing a challenge to the US political system.