Kashkari: Rising Yields, Weak Dollar Signal Shift from US Investments

Federal Reserve Bank of Minneapolis President Neel Kashkari expressed concerns about shifting investor sentiment away from the U.S. as a safe investment amidst rising Treasury yields and a declining dollar. During a CNBC interview, he noted that market movements reflect economic uncertainty and potential changes in how investors view U.S. assets, particularly in light of President Trump's escalating trade war. The dollar's recent decline, which is unusual during tariff increases, suggests a waning confidence in U.S. financial stability. Kashkari emphasized the importance of keeping inflation expectations stable, even as he observed some market stresses but no significant dislocation that would require Fed intervention. The combination of these factors may lead to increased interest in alternative investments, including cryptocurrencies, as the U.S. economy's attractiveness diminishes. He reiterated that if America is perceived as less desirable for investment, it could fundamentally alter current economic dynamics.