{"id":17591,"date":"2026-01-31T21:29:36","date_gmt":"2026-01-31T21:29:36","guid":{"rendered":"https:\/\/microvibenews.com\/?p=17591"},"modified":"2026-01-31T21:29:36","modified_gmt":"2026-01-31T21:29:36","slug":"trump-thinks-a-weaker-dollar-is-great-but-the-u-s-needs-a-stable-currency-as-national-debt-heads-toward-40-trillion-former-fed-president-says","status":"publish","type":"post","link":"https:\/\/microvibenews.com\/?p=17591","title":{"rendered":"Trump thinks a weaker dollar is great, but the U.S. needs a stable currency as national debt heads toward $40 trillion, former Fed president says"},"content":{"rendered":"

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President Donald Trump welcomed the dollar’s recent decline, but a former Federal Reserve president said the astronomical size of U.S. debt requires more stability for the currency. <\/p>\n

The U.S. dollar index has plunged 10% over the last year and 1.2% this month alone. That’s after Trump shocked global market last spring with his “Liberation Day” tariffs, while concerns about ballooning debt, central bank independence, and a schism with European allies have weighed on the greenback more recently.<\/p>\n

“I think it’s great,” Trump said on Tuesday about the dollar’s drop. “Look at the business we’re doing. The dollar’s doing great.”<\/p>\n

The currency later rebounded somewhat after Treasury Secretary Scott Bessent reaffirmed that the U.S. has a strong dollar policy and denied rumors of an intervention to prop up the yen.<\/p>\n

Former Dallas Fed President Robert Kaplan attributed the dollar’s recent slump to investors buying some tail-risk protection by hedging the currency. He also noted that demand for U.S. stocks remains high, contradicting fears of a “sell America” trade.<\/p>\n

“Yes, it is true a weaker dollar boosts exports,” Kaplan told Bloomberg TV on Tuesday. “However, we have in the United States $39 trillion of debt, on its way to $40 trillion plus. And when you have that much debt, I think stability of the currency probably trumps exports. And so I actually think the U.S. is going to want to see a stable dollar.”<\/p>\n

According to the Peter G. Peterson Foundation, U.S. debt currently stands at $38.57 trillion.<\/p>\n

The U.S. has long enjoyed the “exorbitant privilege” of the dollar serving as the world’s reserve currency. With such built-in demand for dollar assets like Treasury bonds, the government can borrow money at lower rates than would otherwise be possible.<\/p>\n

But Trump’s efforts to upend the postwar global order have created doubts about U.S. financial dominance and the sustainability of the national debt if that advantage disappears.<\/p>\n

Still, Kaplan pointed to the overall health of the American economy and prospects for robust growth as continued draws for investors.<\/p>\n

“I think there’s a lot of strengths in the United States in terms of innovation, very strong year for GDP growth coming, we believe, and a lot of positives,” he added.<\/p>\n

Rather than running away from the U.S., markets are managing risk by seeking some alternative safe havens like gold, Kaplan said.<\/p>\n

Meanwhile, Robin Brooks, a senior fellow at the Brookings Institution, argued that a falling dollar won’t hurt demand for Treasury bonds. In fact, it could help, he said in a Substack post on Friday.<\/p>\n

That’s because foreign central banks, especially those in export-oriented Asian economies, have an incentive to buy Treasuries to stop their currencies from rising against the dollar.<\/p>\n

“At the current juncture, this means a falling Dollar should actually be good for the Treasury market,” Brooks wrote. “Dollar weakness mobilizes new demand and\u2014all else equal\u2014puts downward pressure on longer-term yields.”<\/p>\n

This story was originally featured on Fortune.com<\/p>\n

#Trump #thinks #weaker #dollar #great #U.S #stable #currency #national #debt #heads #trillion #Fed #president<\/p>\n","protected":false},"excerpt":{"rendered":"

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