Eurizon SLJ Capital strategist Stephen Jen warned that Washington's current spending spree could erode the US dollar’s reputation as a global safe‑haven. Jen argued that persistent fiscal deficits raise the risk of inflationary pressures, prompting investors to question the dollar’s stability relative to other reserve currencies.

The concern stems from a pattern of expanding budgetary outlays that outpace revenue growth, a dynamic that can weaken confidence in Treasury securities. As the dollar’s allure wanes, capital may flow toward alternatives such as the euro or yen, potentially widening sovereign yield spreads and pressuring US bond prices.

For portfolio managers, the message is clear: monitor fiscal developments closely and adjust exposure to dollar‑denominated assets accordingly. A sustained fiscal imbalance could translate into higher borrowing costs for the US government and reshape the hierarchy of safe‑haven assets.