A new global survey by UBS Asset Management reveals a shift in sentiment among the world’s leading reserve managers, raising red flags over the United States’ reliability as a financial anchor. Two-thirds of central banks surveyed now believe the Federal Reserve’s autonomy is at risk, and nearly half are rethinking their exposure to U.S. assets due to fears of weakening legal and institutional frameworks.
The results reflect heightened global sensitivity to U.S. political and economic unpredictability, particularly under the policies of former President Donald Trump. The administration’s April 2 “Liberation Day” tariffs rattled the dollar and bond markets, while persistent efforts to pressure the Fed into cutting rates have further undermined confidence. Unconventional policy proposals—such as transforming long-term U.S. debt into ultra-long, zero-coupon bonds—have only deepened investor wariness.
According to Max Castelli, head of global sovereign market strategy at UBS, “Liberation Day clearly reshaped how reserve managers evaluate U.S. credibility.”
Of the nearly 40 central banks that participated in the survey, 35% believe the U.S. may encourage allies to convert long-term Treasuries into novel financial instruments. Meanwhile, 29% plan to reduce exposure to American assets as a direct response to these political and fiscal shifts.
Although the dollar still holds its ground as the top global reserve currency, with 80% expecting its dominance to persist, signs of diversification are unmistakable. A net 25% of respondents anticipate cutting their dollar holdings in the coming year.
The search for safer havens is intensifying. Gold stands out as the top non-currency asset: 52% of central banks plan to boost their holdings in the next year, with 39% choosing to repatriate gold currently stored abroad. The growing trend is particularly notable among emerging markets fearful of sanctions and political overreach.
Looking ahead, reserve managers predict the euro will gain the most traction over five years, followed by the renminbi and digital assets. Surprisingly, the dollar plummeted to ninth place in terms of projected asset growth. In the short term, however, more central banks expect to expand renminbi holdings (25%) than euros (6%).
There’s also rising interest in the Canadian dollar, British pound, and Japanese yen, reflecting a broader appetite for risk diversification amid geopolitical instability.
“Europe has a window of opportunity,” Castelli concluded. “But if structural reforms stall, the continent’s financial resurgence may not last.”
