Central-bank reserve managers are growing uneasy about the political backdrop in the United States, according to UBS Asset Management’s annual survey of almost 40 institutions overseeing foreign-exchange reserves. Two in three respondents said the independence of the Federal Reserve is now in jeopardy, and nearly half warned that a deterioration in the US rule of law could become significant enough to force changes in their investment allocations. The findings suggest that recent pressure on the Fed and confrontational trade and fiscal policies out of Washington are undermining confidence in the world’s largest bond market. Thirty-five percent of those polled think the US government could ask allied investors to convert long-dated Treasury holdings into ultra-long, zero-coupon bonds. Roughly 29% of reserve managers already expect to cut exposure to US assets, and on a net basis 25% plan to reduce dollar holdings over the coming 12 months. Even so, almost 80% of respondents still believe the dollar will retain its status as the dominant reserve currency. In the near term, the managers see gold as the biggest beneficiary of the shift in sentiment: 52% intend to increase bullion holdings, and 39% aim to repatriate more of their gold, partly to mitigate sanctions risk. Over the next five years, they anticipate the euro will gain the most from changing reserve patterns, followed by China’s yuan and crypto assets, while in the year ahead the yuan ranks as the top currency addition.