- The US Federal Reserve has surpassed $1 trillion in losses amid high interest rates and mounting national debt, exacerbating challenges to the dollar’s stability.
- Meanwhile, the BRICS coalition’s de-dollarization efforts further threaten the dollar’s global dominance.
In the BRICS coalition’s de-dollarization efforts, the US Central Bank has officially hit over $1 trillion in losses, marking a significant challenge for the dollar. Recent data reveals the Federal Reserve has transformed over $100 billion in paper losses into actual losses, with no immediate relief in sight.
The Federal Reserve concluded 2023 with more than $984 billion in unrealized losses, exacerbated by persistent high interest rates.
The Fed’s current stance on interest rates further complicates efforts to rectify the balance sheet issues. Additionally, economist EJ Antoni highlighted that US national debt interest payments are projected to exceed $1.14 trillion this year, amounting to over 76% of all collected income tax.
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Former Treasury Secretary Steven Mnuchin remarked that a strong dollar has been crucial in managing the growing deficit, but emphasized that the upcoming November presidential election must initiate change to combat the increasing debt concerns. These concerns not only diminish confidence in the US dollar but also contribute to higher inflation and currency erosion.
The BRICS bloc, leading the charge in de-dollarization, has implemented measures to reduce global reliance on the dollar and is considering establishing its own currency to facilitate trade within the alliance. This move could significantly impact the dollar’s value, especially in light of the ongoing issues the US economy faces.
