ECB warns: US policies are eroding confidence and the position of the USD

François Villeroy de Galhau, a member of the ECB Governing Council and Governor of the Bank of France, warns that recent policy choices by the US are eroding global investor confidence and weakening the foundation for the USD’s dominant role. According to him, the pillars that once assured trust in the dollar are under increasing pressure.

Firstly, political criticisms aimed at the US Federal Reserve raise concerns about the independence of monetary policy, a core element of financial credibility. Additionally, protectionist measures such as tariffs reduce global integration, encouraging countries to decrease dependence on the USD-centric system. Fiscal discipline weakens, high deficits and sovereign debt risks also undermine the “safe haven” status of US Treasuries. Finally, concerns about the “weaponization” of the USD payment system are prompting countries to seek alternative infrastructures, moving toward a more multipolar monetary order, where the role of safe assets denominated in euros should be seriously considered.