by Peter Gratton
Investopedia
:max_bytes(150000):strip_icc():format(webp)/GettyImages-2160638126-8586baebb75d45948df003ed6d451a7e.jpg)
For decades, the U.S. dollar has served as the financial world’s storm shelter. Financial turmoil traditionally sends Treasury yields down (a sign people are buying U.S. bonds) and the U.S. dollar up. Yet in the aftermath of Donald Trump’s 2025 tariff announcements, investors were abandoning both—at one point, the greenback plummeted 1.7% in a single day while 30-year Treasury rates spiked to almost 5.0%—meaning people were fleeing U.S. government bonds, not seeking them as shelter from the storm.
There have been previous bouts of stocks and the dollar declining together, such as during a 2011 U.S. credit rating downgrade and the early days of the COVID-19 pandemic. But monetary policy experts fear this isn’t just a passing rainfall, that Trump administration moves antagonizing both the markets and long-time trading partners have generated a tsunami bearing down on global confidence in the American greenback—which took generations of monetary and fiscal policy to build.