Former Treasury Secretary Janet Yellen said the economic uncertainty over Trump’s whiplash tariff policies has prompted a “really very worrying” trend in dollar-based assets.
“We have seen very unusual patterns in financial market development over the past few weeks,” Yellen said. On Monday morning appearance On CNBC’s “Squawk Box.” “We don’t think we see dysfunction in the sense of completely dry liquidity in the market, but a pattern that suggests a loss of confidence in US economic policy.”
“The safety of bedrock financial assets is really very worrying,” she added.
Treasurys It was sold significantly last week amid fears that foreign demand for US debt is weak.
Yellen served on the Federal Reserve for nearly a decade, and chaired the remains during the Obama administration from 2014 to February 2018 before later heading the Treasury Department under then-President Biden.
She said the current market suggests investors are TI-disease about the US treasure trove.
“Usually, when times are confusing and uncertain, there is a desire to invest in safe assets, which tends to push down the yields of the US Treasury, but the yields of the US Treasury have risen,” she said. “Usually, rising US Treasury yields attract a growing capital inflow of the dollar, but the dollar has declined and the US Treasury yield has increased.”
“What it suggests is that investors are beginning to shun dollar-based assets, raising questions about the bedrock of the global financial system, namely the US Treasury’s safety,” she added.
Trump’s vibrating tariff policy – which was charged by his long-standing tariff announcement on April 3 on most imports from other countries – sent a roller coaster market while most countries robbed the scramble to smash trade deals with the US, and delved into China’s own tariffs and other tactics. Trump has placed a 90-day suspension on his proposed “mutual” tariffs, but maintains a new 10% baseline fee, except for Chinese imports.
“Things were just confusing,” Yellen said in an interview with CNBC. “We’ve had mutual tariffs and suspended… This actually creates an environment where we feel paralyzed by the uncertainty about what will happen. It makes planning almost impossible.”
Yellen previously expressed her disastrous impact on the wider economic impact in another interview on CNN on Friday.
“This is the worst self-harm scar I’ve ever seen in my career given to our economy,” she said. “Trump’s tariff plans are causing great damage to our economy.”
