Monetary Matters with Jack Farley “The Dollar Gets Annihilated” | Julian Brigden & Jonny Matthews on Fiscal Dominance, Secular Bond Bear Market, and Outlook on Rates & Tariffs
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Jun 8, 2025 
Julian Brigden, co-founder of MI2 Partners, and Jonny Matthews, a veteran macro trader at SuperMacro, dive into global economic dynamics. They discuss the forces that are weakening sovereign bonds and the implications of fiscal policies on the U.S. dollar. The guests analyze how tariffs impact business investments and bond markets, along with the risks tied to foreign investments. They also touch on productivity growth, inflation trends in Europe, and shifts towards non-U.S. assets amidst rising insurance costs, offering insights for navigating a turbulent financial landscape.
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Global USD Exposure Risk
- USD exposure is extremely high globally and mostly unhedged, creating vulnerability.
- Equity market declines can weaken the dollar, causing foreign investors to sell US assets and withdraw funds.
Dollar's Durable Reserve Status
- The dollar’s role as reserve currency is secure despite fluctuations in value.
- Replacement by currencies like the renminbi is unlikely due to structural economic and geopolitical challenges.
Japan's Fiscal and Bond Challenges
- Japan faces extreme fiscal dominance with low policy rates and high inflation.
- The Bank of Japan struggles to manage bond yields amid unprecedented central bank holdings and illiquid JGB markets.