Global Central Banks Voice Concerns Over US Financial Stability:

According to a new UBS Asset Management survey, central banks across the globe are expressing growing skepticism about the long-term system of the U.S. financial stability. Nearly 67% of reserve managers surveyed fear for the Federal Reserve’s independence, and close to half now believe the U.S. rule of law may deteriorate to a point that could influence future asset allocation.

A major catalyst for this sentiment was the implementation of the April 2 “Liberation Day” tariffs, which triggered volatility across currency and bond markets. These measures shook investor confidence and intensified broader concerns over America’s economic policy direction and fiscal discipline.

UBS’s Max Castelli, Head of Global Sovereign Markets Strategy, emphasized how significantly these developments have shifted global perspectives. “It’s clear that political moves like Liberation Day are changing how reserve managers view the reliability of U.S. assets,” he said.

In light of these events, 29% of reserve managers are actively considering cutting exposure to U.S.-based assets. This includes Treasury securities, which have come under scrutiny following discussions about unconventional instruments like ultra-long, zero-coupon bonds. Over the coming year, a net 25% of respondents said they would decrease their dollar holdings.

While the dollar remains the leading reserve currency—still expected to hold its dominance by 80% of respondents its status is slowly being challenged. The Chinese renminbi appears to be gaining momentum, with 25% of central banks planning to expand their holdings in the next year. In comparison, the euro saw limited enthusiasm, with only 6% of respondents expecting to increase allocations.

At the same time, gold is emerging as a strategic hedge against geopolitical and institutional risk. About 52% of reserve managers are looking to boost their gold reserves, while 39% plan to repatriate gold stored abroad, particularly from U.S. vaults—a move largely driven by concerns over potential sanctions and political interference.

Looking further ahead, the euro, renminbi, and cryptocurrencies are predicted to benefit most from global shifts in asset allocation over the next five years. The U.S. dollar, having topped this list previously, has now fallen to ninth place.

Castelli summarized the sentiment by noting, “The dollar isn’t disappearing, but it is being weighed against more diversified and politically neutral alternatives.”

Global Central Banks Question US Financial Stability:

International central banks are growing increasingly wary of the financial stability of the United States. Recent economic moves, such as new tariffs, have created suspense in International markets.

Many bank managers fear that political activity could weaken the Federal Reserve’s independence. This suspense is forcing them to rethink their long-term investment plans.

Some are diversifying away from US assets and exploring safer options like gold or other reserve currencies. These changes show that US financial stability is no longer taken for granted, and trust must be rebuilt through consistent and transparent policies.

Impact of ‘Liberation Day’ Tariffs on Markets:

The ‘Liberation Day’ tariffs triggered unexpected turbulence in international markets.
Currency and bond prices reacted strongly, affecting investor confidence.

Many experts believe these tariffs signaled a change in US financial stability.
Such activity moves can push international investors to seek more secure or more predictable guaidiance.

The policy shift also sparked debates about long-term trade plans.
For some central banks, it became a reason to rethink exposure to US financial stability.

Gold as a Strategic Hedge Against US Risks:

Gold is becoming a preferred choice for central banks to secure against volatility.
It offers a safe store of value when worries about US financial stability grow.

Many nations are increasing their gold reserves in order to reduce reliance on the dollar.
This shift also indicates worries about political activities that might be harmful to US financial stability.

By holding more gold, reserve directors aim to safeguard their global economies.
It acts as a shield against market shocks and potential sanctions.

Global Reserve Managers Diversifying Portfolios:

International reserve directors are looking for safer and more balanced portfolios.
They are adding assets like gold, renminbi, and even cryptocurrencies to reduce risks.

Questions about US financial prosperity are a key reason for this change.
By diversified investing, they hope to save heavy losses if the US financial stability weakens further.

This strategy also helps them adapt to shifting international trade and currency patterns.
It indicates a long-term move toward more politically independent investments.