Economists and financial analysts have raised concerns that President Donald Trump’s fiscal policies, including substantial tax cuts combined with record government borrowing and his repeated attacks on the Federal Reserve’s independence, are putting the United States' status as a global safe-haven at risk. Reports from the Financial Times and experts like Eswar Prasad highlight that these actions threaten the U.S. dollar’s dominant position in the world monetary system. The Senate is currently engaged in a contentious battle over key legislation related to Trump’s spending plans, which have triggered alarms about rising Treasury yields and potential long-term inflation. Market rallies have occurred amid these developments, but historical precedent warns that undermining the Federal Reserve’s autonomy could lead to economic instability. Critics, including economists such as Laura Tyson, argue that the economic situation has deteriorated under Trump’s leadership, with American voters expressing increased dissatisfaction with the state of the economy compared to the previous year.
“The problem for Trump is that just ‘okay’ is not good enough for American voters, who were deeply unhappy with the state of the economy last year and are actually unhappier with it today,” writes @JamesSurowiecki: https://t.co/lND5AUHTCX
Trump Has Wrecked the US Economy by Laura Tyson, et al @ProSyn https://t.co/u75vNumwJ5
The U.S. may be drifting toward fiscal dominance, as tax cuts are paired with record borrowing and political pressure on the Fed to cut rates. Markets have rallied, but history warns that sidelining monetary independence can lead to long-term inflation and instability. 📉