“The dollar fades as a reserve currency,” warned the headline of a BusinessWeek story, blaming presidential mismanagement for a loss of confidence in the U.S. economy. The story notes how investors around the world no longer want the U.S. dollar, and are moving their cash into German bonds, Japanese yen, and Swiss francs. Based on this account, it’s clear the dollar’s dominance is over but for one thing: The article is dated 1978 and describes the events of the Carter administration.
In reality, of course, the U.S. dollar became stronger than ever, and its position as the world’s number one currency remains undisputed—until this April, that is. That’s when investors responded to President Donald Trump’s “Liberation Day” tariffs by dumping U.S. assets, and causing the yield on Treasury bills to soar as high as 4.62%, up from 3.87% days earlier.
