PIMCO CEO: US Dollar's Reserve Status Unchallenged Despite Trade War

Emmanuel Roman, the CEO of Pacific Investment Management Company (PIMCO), has expressed confidence in the enduring strength of the US dollar and the United States' role as a global financial safe haven. Despite concerns about the US's balance sheet and the ongoing trade war, Roman believes that the US will maintain its position as the world's reserve currency and the most liquid Treasury market.

Roman emphasized that the US dollar's status as the world's reserve currency is unchallenged, and there is no viable alternative that could replace it. He acknowledged that while the dollar might be slightly overvalued, this does not diminish its status as the primary reserve currency. Roman highlighted the enormous liquidity of the US Treasury market, stating that there is no other market where trillions of dollars can be moved as efficiently.

According to Roman, the concept of "American Exceptionalism" also plays a significant role in the popularity of the dollar and US Treasuries among global investors. This idea posits that the US is superior to other nations in terms of values, political system, and historical development. Roman noted that the US financial system's liquidity and efficiency make it an attractive destination for global investors, including those from Japan, who hold approximately $1 trillion in US debt. He also pointed out that US Treasuries serve as a hedge against the yen for Japanese investors, further underscoring the dollar's appeal.

Roman's comments reflect a broader sentiment among financial analysts who believe that the US will continue to be a safe haven for global investors despite various challenges. The liquidity and efficiency of the US Treasury market, combined with the dollar's status as the world's reserve currency, make it an essential component of the global financial system. Roman's optimism is based on the fact that there is no other market that can match the US Treasury market's liquidity and efficiency, making it the go-to destination for global investors seeking a safe haven for their funds.