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Avoid adverse world economic impacts
By Donald Moskowitz
Aug 21, 2025
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Secretary of the Treasury Bessent, the Council of economic Advisers, and other administration financial personnel must continue to provide sound input to President Trump's economic policies; and try to counsel him prior to his pronouncements concerning the economy.

Back in April we narrowly averted an economic meltdown when tariffs were initially imposed on countries. The global shock to economies led to a selloff in the bond markets, including U.S. Treasuries. Only President Trump's 90-day hold on most of the tariffs prevented a catastrophic selloff in the bond markets. We are currently imposing a new round of tariffs.

If the administration is not careful it is possible we could see a collapse of the bond markets with lenders selling off assets. As prices fall, investors could sell their bonds, which could force fund managers to sell their holdings.

The selloff could include U.S. treasuries, which might be exacerbated if foreign countries decide to sell their reserve Treasuries holdings. China has $750 billion in U.S. Treasuries.

The administration should respect the independence and expertise of the Federal reserve to conduct monetary policy, including adjusting interest rates and purchasing or selling Treasuries.

The U.S. dollar has been the world benchmark reserve currency and has been considered risk-free for a century. It is now under threat, and economic policies could create instability in world markets.

World trade can be impacted by our economic policies, and various U.S. trading partners could increase trade with China and other adversarial countries.