Yellen Warns U.S. Policies Erode Investor Confidence

Former Treasury Secretary Janet Yellen expressed significant concerns regarding President Donald Trump's fiscal policies, particularly tariffs, which she believes are undermining trust in U.S. commitments among allies and deterring investors from U.S. assets. She noted a recent spike in U.S. Treasury yields, indicating a loss of confidence in these traditionally safe investments, which raises alarms about the stability of the global financial system. While acknowledging that the current situation does not necessitate Federal Reserve intervention, Yellen warned that the risk of recession has increased. She criticized Trump's approach as potentially isolating the U.S. and allowing rival nations, particularly China, to strengthen ties with global partners. Yellen emphasized the importance of maintaining regular and predictable issuance of Treasury securities rather than shifting to short-term bill issuance in response to market fluctuations. Overall, she conveyed a deep concern over the U.S. economy's direction under current policies.