How low can the dollar go? The world’s reserve currency has declined by more than 10 percent in 2025, its worst start to a year in five decades. Why is this happening, and more importantly, why does it matter?
According to the economist Kenneth Rogoff, the dollar has long been under serious domestic and international pressure, but U.S. President Donald Trump’s policies are accelerating fears about the health and stability of the American economy.
“Undermining our institutions, blowing up the global trading system, taking away Fed independence, [all of this] might give a boost in the short term,” said Rogoff, speaking on FP Live. “But within the next year or year and a half, we actually will see a recession and higher inflation. And Trump may enact some surprising new policies out of frustration to deal with this.”
