Although such debt exceeds 120% of GDP, debt service costs are deemed manageable as long as interest rates remain low. Trump’s pressure on the Fed to cut interest rates has inadvertently undermined investor confidence and prompted “flights [from dollar assets] to safety”. If investors stop buying dollar assets or sell them to purchase non-dollar assets, de-dollarisation will gain momentum. Trump’s actions, especially threats of tariffs and sanctions, have elicited diverse reactions, often undermining dollar hegemony and accelerating de-dollarisation. But in 2025, confidence in dollar assets fell, prompting sell-offs and de-dollarisation.

Source: The Edge Markets January 13, 2026 03:34 UTC