Overview

• Investor mistrust is driven by President Trump’s tariff measures, challenges to Federal Reserve independence and record federal debt pressures.
• U.S. federal liabilities have surpassed $37 trillion, lifting the debt-to-GDP ratio to 122% and heightening reliance on foreign capital.
• ECB President Christine Lagarde has declared a “global euro moment” and urged deeper capital-market integration, including Eurobond issuance.
• The euro zone currently supplies safe sovereign bonds equivalent to only half of its GDP, limiting its capacity to absorb large capital inflows.
• The dollar’s slump has raised import costs for U.S. firms, cut returns for foreign investors and could shift global capital toward Europe if reforms proceed.