Dollar’s Fate Is Set as the Modern Era of Monetary Policy Independence Is Drawing to a Close

U.S. fiscal policy is undermining the Federal Reserve’s autonomy, increasing inflation risks, and devaluing the dollar. Central banks are losing independence, threatening fiat currencies’ real value. Despite a brief dollar rally, its long-term purchasing power is set to decline further due to rising government debt and deficits. Historically, reduced central bank independence leads to higher inflation. As the Fed aligns more with government needs, the quality of its assets decreases, exacerbating the dollar’s decline.