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Exclusive: Some European officials weigh if they can rely on Fed for dollars under Trump


Published on 2025-03-23 01:01:06 - Reuters
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  • Some European central banking and supervisory officials are questioning whether they can still rely on the U.S. Federal Reserve to provide dollar funding in times of market stress, six people familiar with the matter said,

The article discusses concerns among European officials about the reliability of the U.S. Federal Reserve's dollar swap lines under a potential second Trump presidency. These swap lines are crucial for providing dollar liquidity to foreign central banks during financial crises. There's apprehension that Trump might politicize these financial tools, possibly using them as leverage in international negotiations or disputes, which could disrupt the established norms of central bank cooperation. This uncertainty stems from Trump's previous administration's approach to international relations and his comments on using economic power as a diplomatic tool. European officials are now contemplating alternative strategies to ensure dollar liquidity, including enhancing their own financial mechanisms or seeking other international partnerships, to mitigate the risk of being dependent on a potentially unpredictable U.S. policy.

Read the Full Reuters Article at:
[ https://www.msn.com/en-gb/news/world/exclusive-some-european-officials-weigh-if-they-can-rely-on-fed-for-dollars-under-trump/ar-AA1Brdll ]