### Why the U.S. Dollar Is Off to a Weak Start in 2024
The U.S. dollar has had its worst start to a year in over 50 years, with a 10.8% decline since early 2024, according to the U.S. Dollar Index. Harvard economist Kenneth Rogoff attributes this weakening trend to former President Donald Trump’s trade policies, which have created uncertainty in global markets. Trump’s aggressive trade wars, threats of tariffs on foreign investments, and criticism of the Federal Reserve have all contributed to making the dollar less attractive to foreign investors. Additionally, concerns over the U.S. budget deficit and rising national debt—now approaching post-World War II highs—have further eroded confidence in the dollar’s stability.
### How a Weaker Dollar Affects the Economy
A declining dollar has mixed effects on the U.S. economy. On one hand, it makes American exports cheaper, benefiting sectors like finance, consulting, and intellectual property. On the other hand, imports become more expensive, raising costs for consumers and businesses. Workers sending remittances abroad also lose purchasing power as their dollars convert to less foreign currency. Rogoff warns that the dollar’s weakening could signal a broader shift in global economic dominance, similar to the 1970s when President Nixon abandoned the gold standard, leading to a decade of economic instability.
### Long-Term Risks and Investor Sentiment
The dollar’s decline reflects deeper concerns about U.S. fiscal policy and global economic leadership. Investors are increasingly wary of America’s unsustainable debt levels and unpredictable trade policies. Rogoff suggests that the U.S. may be approaching an inflection point where the dollar loses its status as the world’s dominant reserve currency—a shift that could have long-term economic consequences. While a weaker dollar may provide short-term export advantages, the broader instability could lead to higher borrowing costs and reduced foreign investment, further straining the economy.
*This analysis highlights the complex interplay between policy decisions, investor confidence, and global market dynamics, underscoring the potential risks of a sustained dollar decline.*
Ez a cikk a Neural News AI (V1) verziójával készült.
Forrás: https://www.npr.org/2025/07/04/nx-s1-5453739/us-dollar-economy-harvard-university-kenneth-rogoff.