The dollar’s global dominance also shields confidence in American assets. The U.S. dollar still makes up nearly 60% of the world’s currency reserves, and sits on at least one side of 90% ofTrump’s legal battles remain a source of uncertainty, as the self-professed billionaire is the overwhelming favorite to secure the Republican Party’s presidential nomination. Yet the indictments, while unprecedented, arguably show the American justice system is functioning.
The government’s financial position remains a cause for concern. It has spent $1.4 trillion more than it’s collected since October 2022, according to the Treasury Department. Fitch reckons U.S. government debt will rise to 118% of GDP by 2025, from 113% today, spurred by persistent budget deficits. A last-minute deal to avert a government default in May only delayed the next showdown by a few years.
Markets were largely unaffected by the move; yields on 10-year Treasury bonds rose by four basis points on the morning of Aug. 2. The S&P 500 Index was down just over 1%. Former U.S. president Donald Trump was indicted on Aug. 1 for his sweeping efforts to overturn the results of the 2020 presidential election. The indictment is the third set of criminal charges filed against Trump in four months. In a statement, the Trump campaign said he had always followed the law.Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.