Are U.S. Treasuries Safe Assets? Analysis from FED Chairman Powell
On June 24, the Chairman of the Federal Reserve (FED), Jerome Powell, made an important statement about the position of U.S. Treasury bonds (U.S. Treasuries) in the global financial system. He asserted that despite fluctuations, the USD still maintains its role as the dominant reserve currency in the near and distant future.
The Role of U.S. Treasury Bonds in the Reserve Currency Basket
U.S. Treasury bonds have long been viewed as safe-haven assets, thanks to their creditworthiness and extremely high liquidity. When the cryptocurrency market or traditional financial markets show signs of turbulence, investors often shift capital to U.S. Treasuries to preserve their asset value. Powell reinforces this view, demonstrating that it remains a strong support for many global investment portfolios.
The Leverage of the USD as a Global Reserve Currency
Additionally, the USD is viewed as the standard currency in international payments and reserves. Powell's statement affirms the 'geopolitical' strength of the USD, despite the emergence of cryptocurrencies and central bank digital currencies (CBDCs). This reassures investors that the global cash flow will continue to revolve around the greenback.
Impact on Cryptocurrency Investors and Other Financial Assets
Fluctuations in the cryptocurrency market are always linked to changes in risk sentiment. When the FED acknowledges the stability of U.S. Treasuries, capital tends to shift between high-risk assets like cryptocurrencies and safe-haven assets. Therefore, capturing the lesson from this statement helps investors adjust their portfolios, optimize profits, and effectively minimize risks.
Despite the continuous changes in the global economy, the safety and liquidity of U.S. Treasuries remain assured. At the same time, the USD holds strong as the main pillar of the global monetary system. This is valuable information for experts and cryptocurrency investors when building sustainable asset diversification strategies.
Source: https://tintucbitcoin.com/powell-khang-dinh-usd-giu-vi-tri/
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