BlackRock: "Impenetrable armor of the dollar" is falling apart

In recent months, the question of the future of the US dollar as the world's reserve currency has been appearing more and more in the newspapers. The recent agreement to raise the national debt ceiling only exacerbates the situation, creating new debt records for the country and undermining confidence in the US currency.

Rick Reader of BlackRock, the world's largest fund manager, expressed his thoughts on the topic in an interview with Semafor last week. He stated that the US dollar is no longer the irresistible global reserve currency it used to be.

Reader explained that other currencies, including cryptocurrencies, are gradually taking away some of the dollar dominance. He noted that the yuan and the euro are increasingly being used, and some investors are considering cryptocurrencies as an alternative. Interest in gold is also growing.

The analyst pointed out that the reason for this situation is the desire of international investors to diversify their portfolios due to sanctions and deglobalization caused by post-pandemic changes.

He also predicted a US interest rate cut next year, but said he did not expect a return to the extremely low levels of the past decade.

Reeder pointed out that the near-zero interest rate of recent years has led to artificially high prices for many assets, and warned of the possibility of adjustments in the future.