Global Markets Fall Amid Middle East Conflict, Inflation, Interest Rate Moves

President Donald Trump's economic policies, particularly his inconsistent stance on tariffs, have introduced significant volatility and uncertainty in global financial markets, contributing to a weakening U.S. dollar and divergent stock market performances. Since the start of the year, U.S. stocks have underperformed compared to European markets, with indices in Frankfurt, London, and Paris showing stronger gains. The dollar has lost 10% of its value against the euro, its worst decline in 30 years, partly due to concerns over U.S. debt exacerbated by an expensive budget proposal from the Trump administration. This has led to discussions about alternative global reserve currencies, with the euro being touted by ECB President Christine Lagarde, though challenges remain for any competitor to the dollar's dominance. Additionally, geopolitical tensions, such as the Israel-Iran conflict, combined with trade disputes and fluctuating interest rates, have further unsettled markets, raising fears of inflation and economic slowdown. Experts warn that the growing U.S. debt poses risks to bond markets and the broader financial system, signaling a potentially difficult period ahead.