---

---

● Sideways, Stuck, Struggle

U.S. Economic Crisis and Opportunities: The Future of Dollar Hegemony Amidst Stock Market Instability

1. Past Economic Crises and Exchange Rate Adjustments

The U.S. has historically experienced two major exchange rate adjustments.

The first was during the Plaza Accord in the 1980s,

and the second was during the subprime crisis of 2009-2010.

At that time, U.S. consumption plummeted, reducing the current account deficit.

However, a sharp decline in consumption has negative repercussions throughout the economy.

This shows that deficit issues must eventually be adjusted.

2. Stock Market Correction and the Impact of Trump Policies

The U.S. stock market recently plunged 4%, amplifying anxiety.

Over the past two years, stock prices rose by 50-70%, but valuations were excessively high.

The rise was driven by expectations of Trump's pro-business policies,

but actual policy implementation, uncertainties, and tariff issues led to stock price adjustments.

The situation is a mix of short-term corrections and potential bear markets.

In this process, inflation concerns and the Fed's interest rate policies are crucial variables.

3. U.S. Fiscal Problems and National Debt Burden

U.S. national debt has exceeded 120% of GDP.

Persistent fiscal and current account deficits are increasing the intrinsic burden on the U.S. economy.

As interest payments grow, it becomes difficult to allocate finances to other important areas.

Consequently, fiscal soundness is threatened, directly impacting the stock and bond markets.

4. Time Lag in the Global Bond Market and the Fed's Interest Rate Policy

Not only the U.S., but bond markets worldwide are moving diversely based on each country's fiscal policies.

The U.S. Fed is coordinating its interest rate policy between inflation expectations and recession concerns.

Short-term, there is limited room for interest rate cuts,

but long-term, there is a possibility of interest rate adjustments due to falling prices in the event of a recession.

Both the national debt and bond markets are reacting sensitively to uncertainties.

5. Threats to Dollar Hegemony and Alternatives

The dollar has played a key role as the reserve currency for international settlements.

However, recently, foreign central banks and BRICS countries are pursuing de-dollarization and

turning to alternative investment assets like gold and Bitcoin.

Despite the relative rise in the dollar index and fluctuations in the USD/KRW exchange rate,

the dollar's foundational role is still considered solid.

The U.S. is devising various means, including tariffs and fiscal policies, to protect it.

6. Challenges for the Domestic Economy and Boosting Domestic Demand

Korea is at a crossroads where it needs to shift from a structure heavily reliant on U.S. exports to boosting domestic demand.

Boosting domestic demand can be achieved through a combination of future consumption pull, fiscal, and monetary policies.

However, due to aging and limited national financial resources, there are limits to its effectiveness.

Both domestic investors and policymakers must find new growth engines in a challenging environment.

< Summary >

The U.S. economy is experiencing significant volatility in the stock market as it undergoes consumption contraction and deficit adjustments, similar to the Plaza Accord and the subprime crisis.
Expectations of pro-business policies under Trump led to a temporary rise in stock prices, but they have plummeted due to overheated valuations and tariff uncertainties.
Meanwhile, the burden of national debt and current account deficits, interest rate adjustments in the global bond market, and threats to dollar hegemony persist.
Domestically, Korea faces the challenge of reducing its reliance on exports and seeking new growth engines through boosting domestic demand.
Key keywords such as the U.S. economy, stock market, inflation, the Fed, and dollar hegemony explain this situation well.

[Related Articles…] Economic Direction of Trump's Policies | Fed Interest Rate Policy Outlook

*YouTube Source: [이효석아카데미]

– 지금 미국 증시는 박스권에 제대로 갇혔습니다. 탈출하기 쉽지 않아 보입니다ㅣ박종연 IBK연금보험 부장 [풀영상]